a) JJ Inc. issues 10,000 shares of $100 par value preferred stock at a price of...

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a) JJ Inc. issues 10,000 shares of $100 par value preferred stock at a price of $130 per share with a detachable warrant that allows the holder to purchase for each preferred share one share of $25 par common stock at $50 per share. Following the issuance, the preferred stock was selling ex-rights (without the warrants) at a market price of $115, while the warrant was selling for $10 each. The following calculations are required for the issue of preferred Shares: [7M] Issue Value (Cash)= Market Value of Preferred Stock: = Market Value of Warrants: = Total Market Value: = ● ● ● Allocation to Preferred Stock: Allocation to Warrants: The journal entry to record issue of preferred shares with stock warrants: [4M] The following computations are required for the issue of common shares using the stock warrants: [4M] ● Cash received from issue of common shares = Need to eliminate the Common Stock Warrants = ● Value of Common Stock @$25 par = Paid-in-Capital on Common Stock = The journal entry to record issue of common shares using stock warrants.[4M] a) JJ Inc. issues 10,000 shares of $100 par value preferred stock at a price of $130 per share with a detachable warrant that allows the holder to purchase for each preferred share one share of $25 par common stock at $50 per share. Following the issuance, the preferred stock was selling ex-rights (without the warrants) at a market price of $115, while the warrant was selling for $10 each. The following calculations are required for the issue of preferred Shares: [7M] Issue Value (Cash)= Market Value of Preferred Stock: = Market Value of Warrants: = Total Market Value: = ● ● ● Allocation to Preferred Stock: Allocation to Warrants: The journal entry to record issue of preferred shares with stock warrants: [4M] The following computations are required for the issue of common shares using the stock warrants: [4M] ● Cash received from issue of common shares = Need to eliminate the Common Stock Warrants = ● Value of Common Stock @$25 par = Paid-in-Capital on Common Stock = The journal entry to record issue of common shares using stock warrants.[4M]

Answer rating: 100% (QA)

1 Issue Value Cash 10000 x 130 1300000 2 Market Value of Pre... View the full answer