Kelly Company issues 12% bonds with a face value of $10,000 and 600 shares of $10 par

Question:

Kelly Company issues 12% bonds with a face value of $10,000 and 600 shares of $10 par common stock in a combined sale, receiving total proceeds of $23,000.

Required

Record the transaction for each independent assumption shown:

1. The common stock has a current market value of $21 per share; the market value of the bonds is not known.

2. The common stock has a current market value of $24.50 per share; the bonds are selling at 98.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...