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

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.


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