Company issued $4,800$ of its $ $1,000$ par value bonds for $ $1,410,$ providing total cash proceeds of $ $6,768,000.$ There are no bond issue costs. The market price of Redmond$\text{'}$s common shares on the date that the bonds were issued was $ $55$ per share. The bonds were sold with $72,000$ warrants to acquire $72,000$ shares of the$$ company's $ $5$ par value common stock for $ $65$ per share. That$$ is$,$ each bond carries $15$ warrants. Redmond has existing bonds outstanding that currently trade without warrants at $ $1,210.$ There are other Redmond warrants outstanding that trade for $ $50$ each. Assume that the fair value of the bonds is more reliable than the market value of the warrants. $1.$ Prepare the journal entry to record issuance of the bonds assuming that the warrants are nondetachable. $2.$ Prepare the journal entry to record the issuance of the bonds assuming that the warrants are detachable using the proportional method. $3.$ Prepare the journal entry to record the issuance of the bonds assuming that the warrants are detachable using the incremental method. $4.$Assuming that the incremental method is$$ used,

prepare the journal entry required to record the exercise of all warrants.  

Answer rating: 100% (QA)

1 Journal entry to record the issuance of the bonds assuming that the warrants are nondetachable Cas... View the full answer