Fogel Co. has $2,500,000 of 8% convertible bonds outstanding. Each $1,000
bond is convertible into 30 shares of $30 par value ordinary shares. The
bonds pay interest on January 31 and July 31. On July 31, 2012, the holders
of $800,000 bonds exercised the conversion privilege. On that date the market
price of the bonds was 105 and the market price of the ordinary shares was
$36. The total unamortized bond premium at the date of conversion was
$175,000. Fogel should record, as a result of this conversion, a
a. credit of $136,000 to Share Premium—Ordinary.
b. credit of $120,000 to Share Premium—Ordinary.
c. credit of $56,000 to on Bonds Payable.
d. loss of $8,000
麻煩前輩們! 有點混亂~_~"
--
All Comments