(Conversion of Bonds) On January 1, 2011, Trillini Corporation issued $3,000,000 of 10 year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into eight shares of Trillini Corporation $100 par value common stock after December 31, 2012. On January 1, 2013, $600,000 of debentures are converted into common stock, which is then selling at $110. An additional $600,000 of debentures is converted on March 31, 2013. The market price of the common stock is then $115. Accrued interest at March 31 will be paid on the next interest date. Bond premium is amortized on a straight line basis.
Instructions
Make the necessary journal entries for:
(a) December 31, 2012.
(b) January 1, 2013.
(c) March 31, 2013.
(d) June 30, 2013.
Record the conversions using the book value method.