On January 1, 2016, Gless Textiles issued S28 million of 7%, 10-year convertible

Question

On January 1, 2016, Gless Textiles issued S28 million of 7%, 10-year convertible bonds at 101 The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 40 shares of par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 99 (that is, 99% of face amount) Century Services purchased 20% of the issue as an investment Gless's no Required 1. Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century. (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the issuance of the bonds by Gless. General Journal Debit Credit Date January 01 2016 Record entry Clear entry

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(B)

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Date Account titles and Explanation Debit ($) Credit ($) January 01, 2016 Cash ($28,000,000*101%) 28,280,000 Convertible bonds payable 28,000,000 Premium on bonds payable 280,000 January 01, 2016 Investment in convertible bonds ($28,000,000*20%) 5,600,000 Premium on bond investment 56,000 Cash ($28,280,000 * 20%) 5,656,000

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