I need help with a homwork problem on convertible bonds and stock warrants. I need to present the entries required to record the bond transactions.
On Aug 1st 2004, Ryan Corp called its 10% convertible bonds for conversion. The 6,000,000 par bonds were converted into 240,000 shares of 20 par common stock. On Aug 1st there was 525,000 of umamoritzed premium applicable to the bonds. The fair market value of the common stock was $20 per share. Ignore all interest payments.
Can anyone help me?

Using the Book Value Method:

Dr: Bonds Payable $6,000,000
DR: Discount $525,000
Cr: Common Stock $4,800,000
Cr: APIC $1,725,000


You have to eliminate the bonds and unamortized premium still outstanding. Then credit common Stock (par) for stcok acquired. The difference plug in as Additional Paid in Capital