On June 30, 2019, BOBs BEGONE co . issued $10 million of 3% bonds for $10,200,000. Each
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On June 30, 2019, BOBs BEGONE co . issued $10 million of 3% bonds for $10,200,000. Each $1,000 bond was issued with 12 detachable stock warrants, each of which entitled the bondholder to purchase one share of Cano’s no-par common stock for $45. Immediately after issuance of the bonds, the warrants were separately trading for $3 each. Prepare the journal entry to record the issuance of these bonds. Extra Credit Opportunity: For 3 points extra credit, what is the effective interest rate on the bonds, after allocating the appropriate value to the warrants?
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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