Twixt Corp. issued $5,010,000 of convertible bonds on 1 January for $4,800,000 cash. The bond had the following terms: Bonds mature in five years' time. Annual interest, 6%, is paid each 31 December. Bonds are convertible to 501,000 common shares at maturity or can be repaid in cash. This choice is up to Twixt Corp. Current market interest rates are 7%. Required: 1. Assign a value to the liability and the equity portions of the bond. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) 2. Provide the journal entry to record issuance of the bond. (If no entry is required for a transaction/event, select 'No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) 3. Provide a schedule to show interest expense and amortization of the liability over the life of the bond. (Do not

Twixt Corp. issued $5,010,000 of convertible bonds on 1 January for $4,800,000 cash. The bond had the following terms: Bonds mature in five years' time. Annual interest, 6%, is paid each 31 December. Bonds are convertible to 501,000 common shares at maturity or can be repaid in cash. This choice is up to Twixt Corp. Current market interest rates are 7%. Required: 1. Assign a value to the liability and the equity portions of the bond. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) 2. Provide the journal entry to record issuance of the bond. (If no entry is required for a transaction/event, select 'No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) 3. Provide a schedule to show interest expense and amortization of the liability over the life of the bond. (Do not

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter10: Long-term Liabilities

Section: Chapter Questions

Problem 10.1AP

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Similar questions

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