Company issued 4 , 8 0 0 of its $ 1 , 0 0 0 par value
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Question:
Company issued of its $ par value bonds for $ providing total cash proceeds of $ There are no bond issue costs. The market price of Redmonds common shares on the date that the bonds were issued was $ per share. The bonds were sold with warrants to acquire shares of the company's $ par value common stock for $ per share. That is each bond carries warrants. Redmond has existing bonds outstanding that currently trade without warrants at $ There are other Redmond warrants outstanding that trade for $ each. Assume that the fair value of the bonds is more reliable than the market value of the warrants. Prepare the journal entry to record issuance of the bonds assuming that the warrants are nondetachable. Prepare the journal entry to record the issuance of the bonds assuming that the warrants are detachable using the proportional method. Prepare the journal entry to record the issuance of the bonds assuming that the warrants are detachable using the incremental method. Assuming that the incremental method is used,
prepare the journal entry required to record the exercise of all warrants.
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
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