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X WileyPLUS Class Specifications | Sorted yment Opp LE https://edugen.wileyplus.com/edugen/student/mainfr.uni Downloadable eTextbook tice Gradebook ORION Assignment ment NEXT BACK PRINTER VERSION FUL

X
WileyPLUS
Class Specifications | Sorted
yment Opp
LE
https://edugen.wileyplus.com/edugen/student/mainfr.uni
Downloadable eTextbook
tice
Gradebook
ORION
Assignment
ment
NEXT
BACK
PRINTER VERSION
FULL SCREEN
CALCULATOR
Exercise 16-2
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Sandhill Inc. issued $3,780,000 of 9%, 10-year convertible bonds on June 1, 2017, at 98 plus accrued interest. The bonds
were dated April 1, 2017, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a
straight-line basis.
On April 1, 2018, $1,417,500 of these bonds were converted into 30,000 shares of $19 par value common stock. Accrued
interest was paid in cash at the time of conversion.
(a) Prepare the entry to record the interest expense at October 1, 2017. Assume that accrued interest payable was
credited when the bonds were issued.
(b) Prepare the entry to record the conversion on April 1, 2018. (Book value method is used.) Assume that the entry to
record amortization of the bond discount and interest payment has been made.
(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry
is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal
places, e.g. 5,125.)
Credit
Debit
No. Account Titles and Explanation
56,700
(a) Interest Payable
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