14 - 37 Convertible Bonds Assume the bondholder exercise one-half of their option to convert the bonds into shares of stock when there is an unamortiz
{"Image DocumentName": "Convertible Bonds", "Image ImageDescription": "Assume the bondholder exercise one-half of their option to convert the bonds into shares of stock when there is an unamortized premium of  2,000,000 associated with these bonds. The bonds are removed from the accounting records and the new shares issued are recorded at the same amount (in other words, at the book value of the bonds). At Date of Exercise of One-half of the Bonds. HTL (Issuer) Convertible bonds payable 50,000,000. Premium on bonds payable 1,000,000. Common stock 2,000,000. Paid-in capital \u2013 excess of par 49,000,000. Assume the bondholder exercise one-half of their option to convert the bonds into shares of stock when there is an unamortized premium of  2,000,000 associated with these bonds. The bonds are removed from the accounting records and the new shares issued are recorded at the same amount (in other words, at the book value of the bonds). On the date of exercise HTL will debit convertible bonds payable for  50,000,000, debit premium on bonds payable for  1.000,000, credit common stock for  2.000,000, and credit paid-in capital in excess of par for  49,000, ,000 bonds \u00d7 40 shares \u00d7  1 par =  2,000,000 par value.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}