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Get Full Access to Intermediate Accounting - 15 Edition - Chapter 16 - Problem 7
Get Full Access to Intermediate Accounting - 15 Edition - Chapter 16 - Problem 7

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# Four years after issue, debentures with a face value of

ISBN: 9781118147290 164

## Solution for problem 7 Chapter 16

Intermediate Accounting | 15th Edition

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Problem 7

Four years after issue, debentures with a face value of \$1,000,000 and book value of \$960,000 are tendered for conversion into 80,000 shares of common stock immediately after an interest payment date. At that time, the market price of the debentures is 104, and the common stock is selling at \$14 per share (par value \$10). The company records the conversion as follows. Bonds Payable 1,000,000 Discount on Bonds Payable 40,000 Common Stock 800,000 Paid-in Capital in Excess of Par Common Stock 160,000 Discuss the propriety of this accounting treatment.

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##### ISBN: 9781118147290

This textbook survival guide was created for the textbook: Intermediate Accounting, edition: 15. The full step-by-step solution to problem: 7 from chapter: 16 was answered by , our top Business solution expert on 11/23/17, 05:08AM. Intermediate Accounting was written by and is associated to the ISBN: 9781118147290. Since the solution to 7 from 16 chapter was answered, more than 290 students have viewed the full step-by-step answer. The answer to “Four years after issue, debentures with a face value of \$1,000,000 and book value of \$960,000 are tendered for conversion into 80,000 shares of common stock immediately after an interest payment date. At that time, the market price of the debentures is 104, and the common stock is selling at \$14 per share (par value \$10). The company records the conversion as follows. Bonds Payable 1,000,000 Discount on Bonds Payable 40,000 Common Stock 800,000 Paid-in Capital in Excess of Par Common Stock 160,000 Discuss the propriety of this accounting treatment.” is broken down into a number of easy to follow steps, and 90 words. This full solution covers the following key subjects: stock, common, par, payable, bonds. This expansive textbook survival guide covers 24 chapters, and 633 solutions.

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