Question: Question is a multi step question. There is no part a, just incorrect numbering. 9. On 1/2/YR1 XYZ, Inc. issued 1,000 bonds with a face
Question is a multi step question. There is no part a, just incorrect numbering.
9. On 1/2/YR1 XYZ, Inc. issued 1,000 bonds with a face value of $1,000 each for $1,100 each. The bonds have a coupon rate of 10% and pay interest semiannually and mature in ten years. Each bond was issued with 20 detachable stock warrants which entitles the holder of each warrant to purchase one share of the company's common equity for $40. The warrants expire in five years. The company amortizes any discount or premium using the straight-line method. b) On 12/31/YR3, immediately after the sixth interest payment, one half of the warrants were exercised. The common equity traded at $50 on this day. Prepare the required journal entry for the option exercise. c) The remaining warrants were never exercised. Prepare the journal entry required. 9. On 1/2/YR1 XYZ, Inc. issued 1,000 bonds with a face value of $1,000 each for $1,100 each. The bonds have a coupon rate of 10% and pay interest semiannually and mature in ten years. Each bond was issued with 20 detachable stock warrants which entitles the holder of each warrant to purchase one share of the company's common equity for $40. The warrants expire in five years. The company amortizes any discount or premium using the straight-line method. b) On 12/31/YR3, immediately after the sixth interest payment, one half of the warrants were exercised. The common equity traded at $50 on this day. Prepare the required journal entry for the option exercise. c) The remaining warrants were never exercised. Prepare the journal entry required
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