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Question 11
The primary purpose of a quasi-reorganization is to give a
corporation the opportunity to
Question 12
Clay Corp. had $600,000 of convertible 8% bonds outstanding at
June 30, 2005. Each $1,000 bond was convertible into 10 shares of
Clay's $50 par value common stock. On July 1, 2005, the interest
was paid to bondholders and the bonds were converted into
common stock, which had a fair market value of $75 per share.
The unamortized premium on these bonds was $12,000 at the date
of conversion. Under the book value method, this conversion
increased the following elements of the stockholders' equity
section by
Question 13
On December 31, 2003, Moss Co. issued $1,000,000 of 11% bonds
at 109. Each $1,000 bond was issued with 50 detachable stock
warrants, each of which entitled the bondholder to purchase one
share of $5 par common stock for $25. Immediately after
issuance, the market value of each warrant was $4. On December
31, 200 3, what amount should Moss record as discount or
premium on issuance of bonds?
Question 14
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