The Dally Company offered warrants to buy $1 par common stock at $10 with its issuance of 100 bonds (face value: $100 per bond). Four warrants were issued with every bond. Sale price of the bonds and detachable warrants was $12,000. After issuance, the bonds (without warrants) are quoted at 92 and the warrants are quoted at $2 each. The journal entry to record the issuance of the bonds and warrants includes: 

a. A credit to Premium on Bonds for $800 

b. A credit to Paid-In Capital -SW for $255 

c. A credit to Premium on Bonds for $1,040 

d. A debit to Bond Discount for $960 

e. A credit to Paid-in Capital –SW for $800

Answer rating: 100% (QA)

Total price 12000 Standalone price Bond 100 92 9200 Detachable ... View the full answer