Ok, was I supposed to know there were 10 bonds issued in this example or was that just left out because the number of bonds are not the point of the example?:
Example:
A firm has $10,000 of convertible bonds outstanding with a book value of $9,200. Each bond is convertible into 30 shares of $20 par value common stock with a current market value of $32 per share.
Conversion entry under the book value method:
Bonds Payable 10,000
Discount on Bonds Payable ($10,000 – $9,200) 800
Common Stock (10 bonds)(30)($20 par) 6,000
Contributed Capital in Excess of Par, Common 3,200
FAR: 4/19/2014 - 85!
AUD: 5/27/2014 - 90!
REG: 7/18/2014 - 81!
BEC: 8/13/2014 - 84!
4 up, 4 down, in 4 months.
Licensed 9/22 in NC.
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