During 2005, Brad Co. issued 5,000 shares of $ 100 par convertible preferred stock for $ 110 per share. One share of preferred stock can be converted into three shares of Brad ' s $ 25 par common stock at the option of the preferred shareholder. On December 31, 2006, when the market value of the common stock was $ 40 per share, all of the preferred stock was converted. What amount should Brad credit to Common Stock and to Additional Paid-in Capital-- Common Stock as a result of the conversion?
Question 15
A company declared a cash dividend on its common stock on December 15, 2003, payable on January 12, 2004. How would this dividend affect stockholders ' equity on the following dates?
Question 16
Beck Corp. issued 200,000 shares of common stock when it began operations in 2003 and issued an additional 100,000 shares in 2004. Beck also issued preferred stock convertible to 100,000 shares of common stock. In 2005, Beck purchased 75,000 shares of its common stock and held it in Treasury. At December 31, 2005, how many shares of Beck ' s common stock were outstanding?
Question 17
On January 2, 2005, Nast Co. issued 8 % bonds with a face amount of $ 1,000,000 that mature on January 2, 2011. The bonds were issued to yield 12 %, resulting in a discount of $ 150,000. Nast incorrectly used the straight-line method instead of the effective interest method to amortize the discount. How is the carrying amount of the bonds affected by the error?
Question 18
Deb Co. records all sales using the installment method of accounting. Installment sales contracts call for 36 equal monthly cash payments.