Question: <a href=ISSUER Corp. needed to raise money and, on 01/01/2010 issued $6 million of 8%, 10-year convertibl…” />

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Question: ISSUER Corp. needed to raise money and, on 01/01/2010 issued $6 million of 8%, 10-year convertibl…
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Show transcribed image text ISSUER Corp. needed to raise money and, on 01/01/2010 issued $6 million of 8%, 10-year convertible bonds at 102. The bonds pay interest semiannually on 06/30 and 12/31. Each $1,000 bond is convertible into 40 shares of $1 par common stock. INVESTOR Corp. purchased 20% of the issue as an investment. On 07/01/2014, the market price per share for ISSUER Corp. common was $32, and INVESTOR Corp. converted all of its bonds into common stock. Both companies use the straight-line method for amortization. When answering this question, you may use either the "gross method" or the "net method" for both the issuer and the investor. Make the of the bonds on the issuer and the investor books. Make the journal entries for the conversion on the books of the issuer and the investor.

ISSUER Corp. needed to raise money and, on 01/01/2010 issued $6 million of 8%, 10-year convertible bonds at 102. The bonds pay interest semiannually on 06/30 and 12/31. Each $1,000 bond is convertible into 40 shares of $1 par common stock. INVESTOR Corp. purchased 20% of the issue as an investment. On 07/01/2014, the market price per share for ISSUER Corp. common was $32, and INVESTOR Corp. converted all of its bonds into common stock. Both companies use the straight-line method for amortization. When answering this question, you may use either the "gross method" or the "net method" for both the issuer and the investor. Make the of the bonds on the issuer and the investor books. Make the journal entries for the conversion on the books of the issuer and the investor.

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