On January 1, 2025, A Pile of Ship Ltd. issued 95,000 convertible preferred shares and received...

 

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On January 1, 2025, A Pile of Ship Ltd. issued 95,000 convertible preferred shares and received proceeds of $6,000,000. These shares pay cumulative dividends of 6%. Buyers of the preferred shares also received a detachable warrant with each share purchased. Each warrant gives the holder the right to buy one common share at $35 per share within 10 years. Shortly after the issuance of the preferred shares, the detachable warrants traded at $8 each. On January 1, 2028, 65% of the warrants were exercised. The market price of the shares at the time of exercise was $75. Required: Prepare the journal entry for the exercise of the warrants on January 1, 2028. Use the table below. Instructions: Debits are positive (eg. 1000) and credits are negative (-1000) If an account is not applicable please enter 0 Do not use $ or commas in your answer Do not round intermediary calculations, round final answer to nearest number Amount (debits are postive (eg. 1000) & credits are negative (eg. -1000) 2161250 -2655250 Account Cash Common Shares Contributed surplus-warrants Preferred shares 0 Click Save and Submit to T 494000 On January 1, 2025, A Pile of Ship Ltd. issued 95,000 convertible preferred shares and received proceeds of $6,000,000. These shares pay cumulative dividends of 6%. Buyers of the preferred shares also received a detachable warrant with each share purchased. Each warrant gives the holder the right to buy one common share at $35 per share within 10 years. Shortly after the issuance of the preferred shares, the detachable warrants traded at $8 each. On January 1, 2028, 65% of the warrants were exercised. The market price of the shares at the time of exercise was $75. Required: Prepare the journal entry for the exercise of the warrants on January 1, 2028. Use the table below. Instructions: Debits are positive (eg. 1000) and credits are negative (-1000) If an account is not applicable please enter 0 Do not use $ or commas in your answer Do not round intermediary calculations, round final answer to nearest number Amount (debits are postive (eg. 1000) & credits are negative (eg. -1000) 2161250 -2655250 Account Cash Common Shares Contributed surplus-warrants Preferred shares 0 Click Save and Submit to T 494000

Answer rating: 100% (QA)

Answer The journal entry for the exercise of the warrants on January ... View the full answer