Patrick rach international issued 5% bonds convertible into shares of the company's common stock. rach applies u. s. gaap. upon issuance, patrick rach international should record:

-the proceeds of the bond issue as part debt and part equity
-the proceeds of the bond issue entirely as debt
-the proceeds of the bond issue entirely as equity
-the proceeds of the bond issue entirely as debt if the bonds are mandatorily redeemable

Rach applies U.S. GAAP. Upon issuance, Patrick Rach International should record: The proceeds of the bond issue entirely as debt.

Explanation:

The accounting framework adopted by the US has commonly accepted accounting principles. Commission on Securities and Exchange.

The debt interest reserve fund might be entirely covered by bond proceeds on issuing of a bond, might be funded across time, financed by a loan or other kind of insurance scheme (designated below) or may only be funded when a certain event occurs (e.g. in case of failure to honor a bonds agreement).

Lenders could sometimes permit a guarantee bond or credit letter to meet the debt interest reserve fund requirement rather than cash. When the reserve fund in respect of debt service disbursements is used, in whole or in portion, the issuer is normally obligated to re-fill the fund from the initial income available or in regular repayments for a period of time.

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.