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On January 1 2016 Super View Video, Incorporated issued $ 1550000 of $ 1000 par value 8%, six- year bonds Interest is payable semiannually each

On January 1, 2016, Super View Video, Incorporated issued $ 1,550,000 of $ 1,000 par value, 8%, six- year bonds. Interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the period on July 1, 2016. The market rate of interest for similar non- convertible bonds on the date of the bond issue was 10%. The bonds were sold for $ 1,704,287, yielding an effective rate of 6%. Each bond is convertible into 20 shares of Super View’s $ 1 par value common stock. Assume there is no beneficial conversion option. Required a. Prepare the amortization table for the bond issue, assuming that Super View uses the effective interest rate method of amortization. b. Prepare the journal entry to record the bond issue. c. Prepare the journal entry to record the first interest payment. d. The bonds converted on January 1, 2019. Prepare the journal entry to record the bond conversion.

Apr 22 2020 View more View Less

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