On December 31, 2007, the balance sheet of Gamma Corporation reported bonds outstanding with a face value of $2,000,000 and a related unamortized premium of $60,000. Interst is payable semiannually on January 1 and July 1.
a. Prepare an entry in journal form without explanations to record the retirement ofbonds with a face value of $1,200,000 on January 1, 2008, assuming the bonds were redeemed at a call price of 104.
b. Prepare an entry in journal form without explanation on January 1, 2008, to record the conversion of bonds with a face value of $800,000 into common stock. Each $1,000 bond is convertible into 50 shares of $20 par value common stock.
a. Prepare an entry in journal form without explanations to record the retirement ofbonds with a face value of $1,200,000 on January 1, 2008, assuming the bonds were redeemed at a call price of 104.
b. Prepare an entry in journal form without explanation on January 1, 2008, to record the conversion of bonds with a face value of $800,000 into common stock. Each $1,000 bond is convertible into 50 shares of $20 par value common stock.