On January 1, 2024, Madison Products issued $45 million of 8%, 10-year convertible bonds at a net price of $45.5 million. ⚫ Madison recently issued similar, but nonconvertible, bonds at 99 (that is. 99% of face amount). . The bonds pay interest on June 30 and December 31. • Each $1,000 bond is convertible into 30 shares of Madison's no par common stock. • Madison records interest by the straight-line method. . On June 1, 2026, Madison notified bondholders of its intent to call the bonds at face value plus a 1% call premium on July 1 2026. ⚫ By June 30, all bondholders had chosen to convert their bonds into shares as of the interest payment date. ⚫ On June 30, Madison paid the semiannual interest and issued the requisite number of shares for the bonds being converte equired: ssume that Madison Products prepares its financial statements according to International Financial Reporting Standards using method. & 2. Prepare the journal entries for the issuance of the bonds by Madison and interest payment for the June 30, 2024. Prepare the journal entries for the June 30, 2026, interest payment by Madison and the conversion of the bonds (book value ethod). Complete this question by entering your answers in the tabs below.
On January 1, 2024, Madison Products issued $45 million of 8%, 10-year convertible bonds at a net price of $45.5 million. ⚫ Madison recently issued similar, but nonconvertible, bonds at 99 (that is. 99% of face amount). . The bonds pay interest on June 30 and December 31. • Each $1,000 bond is convertible into 30 shares of Madison's no par common stock. • Madison records interest by the straight-line method. . On June 1, 2026, Madison notified bondholders of its intent to call the bonds at face value plus a 1% call premium on July 1 2026. ⚫ By June 30, all bondholders had chosen to convert their bonds into shares as of the interest payment date. ⚫ On June 30, Madison paid the semiannual interest and issued the requisite number of shares for the bonds being converte equired: ssume that Madison Products prepares its financial statements according to International Financial Reporting Standards using method. & 2. Prepare the journal entries for the issuance of the bonds by Madison and interest payment for the June 30, 2024. Prepare the journal entries for the June 30, 2026, interest payment by Madison and the conversion of the bonds (book value ethod). Complete this question by entering your answers in the tabs below.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 9P
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Question
Transcribed Image Text:On January 1, 2024, Madison Products issued $45 million of 8%, 10-year convertible bonds at a net price of $45.5 million.
■ Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount).
. The bonds pay interest on June 30 and December 31.
• Each $1,000 bond is convertible into 30 shares of Madison's no par common stock.
• Madison records interest by the straight-line method.
⚫ On June 1, 2026, Madison notified bondholders of its intent to call the bonds at face value plus a 1% call premium on July 1,
2026.
■ By June 30, all bondholders had chosen to convert their bonds into shares as of the interest payment date.
⚫ On June 30, Madison paid the semiannual interest and issued the requisite number of shares for the bonds being converted.
Required:
Assume that Madison Products prepares its financial statements according to International Financial Reporting Standards using the net
method.
1. & 2. Prepare the journal entries for the issuance of the bonds by Madison and interest payment for the June 30, 2024.
3. Prepare the journal entries for the June 30, 2026, interest payment by Madison and the conversion of the bonds (book value
method).
Complete this question by entering your answers in the tabs below.
Req 1 and 2
Req 3
Prepare the journal entries for the June 30, 2026, interest payment by Madison and the conversion of the bonds (book value method).
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in
whole dollars.
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Journal entry worksheet
<
1
2
Record the interest payment.
Note: Enter debits before credits.
Date
June 30, 2028
General Journal
Debit
Credit
Record entry
Clear entry
View general journal
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