Tweaker, Inc., is a social media corporation and has opted to follow IFRS. It issued 25-year...
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Tweaker, Inc., is a social media corporation and has opted to follow IFRS. It issued 25-year 8% bonds with a maturity value of $300,000 on 1/1/X0. 3 warrants were attached to each $1,000 bond. Each warrant entitled its holder to purchase one common share in Tweaker at $130 each. Based on a market based expected yield of 10%, the company priced the bonds only at $253,884. The market value of the warrants on the date of the issue was $27 each. On March 31, 20X5, when the market price of Tweaker's shares reached $180, 70% of the warrant holders exercised their options to purchase shares in the company. Thereafter on December 31, 20X8, when the market conditions seemed favourable, the company called in 30% of the outstanding bonds at 105 and cancelled them. The recorded balance of the bond discount on June 30, 20X8 was $28,182. Similarly on December 31, 20X8, the balance was $26,589 and $24,918 on June 30, 20X9. 4. Prepare the appropriate journal entry, in proper format, to record the exercising of the warrants on March 31, 20X5. (5 marks) 5 Pronars th Tweaker, Inc., is a social media corporation and has opted to follow IFRS. It issued 25-year 8% bonds with a maturity value of $300,000 on 1/1/X0. 3 warrants were attached to each $1,000 bond. Each warrant entitled its holder to purchase one common share in Tweaker at $130 each. Based on a market based expected yield of 10%, the company priced the bonds only at $253,884. The market value of the warrants on the date of the issue was $27 each. On March 31, 20X5, when the market price of Tweaker's shares reached $180, 70% of the warrant holders exercised their options to purchase shares in the company. Thereafter on December 31, 20X8, when the market conditions seemed favourable, the company called in 30% of the outstanding bonds at 105 and cancelled them. The recorded balance of the bond discount on June 30, 20X8 was $28,182. Similarly on December 31, 20X8, the balance was $26,589 and $24,918 on June 30, 20X9. 4. Prepare the appropriate journal entry, in proper format, to record the exercising of the warrants on March 31, 20X5. (5 marks) 5 Pronars th
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Related Book For
Intermediate Accounting
ISBN: 978-0176509736
10th Canadian Edition, Volume 1
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,
Posted Date:
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