Cruise, Inc. has $320,000 convertible bonds outstanding on January 1. The bonds were
issued at par value. The bonds are to be converted to the corporation's common stock. The bondholders
will receive 140,000 shares no par common stock at the time of conversion.
Prepare the journal entry Cruise, Inc. will record in its accounting records on the January 1 conversion date.
| Date | Description | Debit | Credit |
|---|---|---|---|
| 01/01 | |||
| 01/01 | |||
| 01/01 | to record the conversion of bonds. | ||