In 2015, The Platinum Company issued $700,000 8% bonds with 700 non-detachable warrants for $765,000 cash. Each warrant entitled the holder to buy 100 shares of The Platinum Company’s $2 par common stock at $20 per share and required the surrender of the attached $1,000 bond. On March 2, 2021, all The Platinum Company bondholders exercised their warrants for new shares and forfeited the bonds when shares were trading at $40 per share. On March 2, 2021, the unamortized premium on the bonds was $25,000.

Prepare the necessary journal entry for the bond conversion on March 2, 2021. Assume that The Platinum Company uses the market method to record the stock issuances.

Answer rating: 100% (QA)

Step 1 Introduction iNondetachable warrants is the security give... View the full answer