On January 1, 2018, Gless Textiles issue December 31. Each $1,000 bond is conver

Question

On January 1, 2018, Gless Textiles issue December 31. Each $1,000 bond is convertible into 40 shares of Gless's no par common stock. Bonds that are similar in all r except that they are nonconvertible, currently are selling at 99 (th t is, 99% of face amount. Century Services purchased 15% of the d $27 million of 8%, 10-year convertible bonds at 101, The bonds pay interest on June 30 and e as an investment. Required: 2. Prepare the journal entries for the June 30, 2022, interest payment by both Gless and Century assuming both use the straight-line 1. Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century ook method 3. On July 1, 2023, when Gless's common stock had a market price of $33 per share, Century converted the bonds it held. Prepare the journal entries by both Gless and Century for the conversion of the bonds (book value method). Complete this question by entering your answers in the tabs below. Required 1Required 2 Required 3 Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond your answers in whole dollars. If no entry is required for a transaction/event, select "Noj account field.) investment by Century. . (Enter ournal entry required" in the first Journal entry worksheet 20f 9EE Next > Prev

Explanation / Answer

Journal Entries :-

2) Journal Entries :-

3) Journal Entries :-

S.No. Particulars Debit($) Credit($) 1) Cash A/c Dr. ($27million * 101%) 27270000 To Convertible Bonds Payable A/c 27000000 To Premium on Bonds Payable A/c 270000 (Issuance of bonds by Gless) Investment in Convertible Bonds A/c Dr.($27million*15%) 4050000 Premium on bonds payable A/c Dr. 40500 To Cash A/c ($4050000*101%) 4090500 (Purchase of bond investment by century)

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