Convertible bonds into common stock affect earnings? Custom Essay

On August 31, 2010, Chicksaw Industries issued $25 darling of its 30-year, 6% equivalent bonds erad August 31, charges to afford 5%. The bonds are equivalent at the liberty of the investors into 1,500,000 divides of Chicksaw’s contemptible store. Chicksaw registers concern charge at the effectual rebuke. On August 31, 2013, investors in Chicksaw’s equivalent bonds tendered 20% of the bonds control alteration into contemptible store that had a trade rate of $20 per divide on the era of alteration.On January 1, 2012, Chicksaw Industries issued $40 darling of its 20-year, 7% bonds erad January 1 at a charge of afford 8%. On December 31, 2013, the bonds were extinguished coming through wages in the notorious trade by Chicksaw control $40.5 darling.
Required:
1. Using the dimensions rate manner, would recording the alteration of the 6% equivalent bonds into contemptible store assume rights? If so, by how abundant? Would rights be assumeed if the trade rate manner is used? If so, by how abundant?
2. Were the 7% bonds issued at visage rate, at a discount, or at a reward? Explain
3. Would the totality of concern charge control the 7% bonds be excellent in the pristine year or the assist year of the expression to manliness? Explain
4. How should perform or waste on coming extinguishment of something-due be strong? Does the extinguishment of the 7% bonds termination in a perform or waste? Explain

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