Hoffman Corporation issued $80 million of 7%, 10-year bonds at 104. Each of the 80,000 bonds was issued with 11 detachable stock warrants, each of which entitled the bondholder to purchase, for $22, one share of $1 par common stock. At the time of sale, the market value of the common stock was $27 per share and the market value of each warrant was $5. Prepare the journal entry to record the issuance of the bonds. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event General Journal Debit Credit 1 Cash 83.2 Discount on bonds payable 40.8 X Bonds payable 80.0 O Equity-stock warrants 44.0 X Next > ( Prev 6 of 7
Hoffman Corporation issued $80 million of 7%, 10-year bonds at 104. Each of the 80,000 bonds was issued with 11 detachable stock warrants, each of which entitled the bondholder to purchase, for $22, one share of $1 par common stock. At the time of sale, the market value of the common stock was $27 per share and the market value of each warrant was $5. Prepare the journal entry to record the issuance of the bonds. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event General Journal Debit Credit 1 Cash 83.2 Discount on bonds payable 40.8 X Bonds payable 80.0 O Equity-stock warrants 44.0 X Next > ( Prev 6 of 7
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Hoffman Corporation issued $80 million of 7%, 10-year bonds at 104. Each of the 80,000 bonds was issued with 11 detachable stock
warrants, each of which entitled the bondholder to purchase, for $22, one share of $1 par common stock. At the time of sale, the
market value of the common stock was $27 per share and the market value of each warrant was $5.
Prepare the journal entry to record the issuance of the bonds. (Enter your answers in millions rounded to 1 decimal place (i.e.,
5,500,000 should be entered as 5.5). If no entry is required for a transaction/event, select "No journal entry required" in the first
account field.)
No
Event
General Journal
Debit
Credit
1
Cash
83.2
Discount on bonds payable
40.8 X
Bonds payable
80.0 O
Equity-stock warrants
44.0 X
Next >
( Prev
6 of 7](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa2c014cc-a43d-4e71-980d-4fdf7286b827%2F51ff7ee0-ed92-4df5-a7a4-dd4fed8ff432%2Fad4bebx_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Hoffman Corporation issued $80 million of 7%, 10-year bonds at 104. Each of the 80,000 bonds was issued with 11 detachable stock
warrants, each of which entitled the bondholder to purchase, for $22, one share of $1 par common stock. At the time of sale, the
market value of the common stock was $27 per share and the market value of each warrant was $5.
Prepare the journal entry to record the issuance of the bonds. (Enter your answers in millions rounded to 1 decimal place (i.e.,
5,500,000 should be entered as 5.5). If no entry is required for a transaction/event, select "No journal entry required" in the first
account field.)
No
Event
General Journal
Debit
Credit
1
Cash
83.2
Discount on bonds payable
40.8 X
Bonds payable
80.0 O
Equity-stock warrants
44.0 X
Next >
( Prev
6 of 7
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