Use the following information for questions.
On July 1, 2017, Casablanca Ltd.issued $6,000,000 (par value), 9%, ten-year convertible bonds at 98 plus accrued interest.The bonds were dated April 1, 2017 with interest payable quarterly on July 1, October 1, January 1 and April 1.If the bonds had NOT been convertible, they would have sold for 96.1 plus accrued interest.The bond discount is amortized on a straight-line basis.On April 1, 2018, $1,200,000 of these bonds were converted into 500 no par common shares.Accrued interest was paid in cash at the time of conversion.
-If Interest Payable were credited when the bonds were issued, what is the debit to Interest Expense on July 1, 2017?
A)$129,000
B)$135,000
C)$141,000
D)$143,923

Question

Quizplus · Accepted Answer

The Answer of Use the following information for questions.
On July 1, 2017, Casablanca Ltd.issued $6,000,000 (par value), 9%, ten-year convertible bonds at 98 plus accrued interest.The bonds were dated April 1, 2017 with interest payable quarterly on July 1, October 1, January 1 and April 1.If the bonds had NOT been convertible, they would have sold for 96.1 plus accrued interest.The bond discount is amortized on a straight-line basis.On April 1, 2018, $1,200,000 of these bonds were converted into 500 no par common shares.Accrued interest was paid in cash at the time of conversion.
-If Interest Payable were credited when the bonds were issued, what is the debit to Interest Expense on July 1, 2017?
A)$129,000
B)$135,000
C)$141,000
D)$143,923

Use the Following Information for Questions