Essay
The following events relate to Mathers Corporation's issue of convertible debentures:
•On January 1, 2012, the Mathers Corporation issued $500,000 of 12% convertible bonds for $460,000. The bonds are due on January 1, 2022, and interest is paid on July 1 and January 1. Each $1,000 bond is convertible into 30 shares of common stock with a par value of $1 per share. On the date of bond issuance, a share of common stock was selling at $24.
•On January 2, 2014, 12% convertible bonds with a face value of $300,000 were converted into common stock. The market value of the common stock on the date of conversion was $40 per share. Mathers uses the straight-line method to amortize premiums and discounts.
Required: 
Correct Answer:
Verified
Correct Answer:
Verified
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