Hoffman Corporation issued $80 million of 7%, 10-year bonds at 104. Each of the 80,000 bonds was issued with 11 detachable stockwarrants, each of which entitled the bondholder to purchase, for $22, one share of $1 par common stock. At the time of sale, themarket 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 firstaccount field.)NoEventGeneral JournalDebitCredit1Cash83.2Discount on bonds payable40.8 XBonds payable80.0 OEquity-stock warrants44.0 XNext >( Prev6 of 7

Equity - Stock warrants = No. of bonds x No.of detachable stock warrant x Market value of each…

Answered: Hoffman Corporation issued $80 million…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assume that you are the accountant of one of the investors of the bonds. The investor purchased P10, 000,000.00 of Retail Treasury Bond in February with 4.375% interest, 5-years. Prepare journal entries for the purchase of the RTBs, accrual of interest and when the bonds are redeemed.
5. On December 31, 2018, the balance sheet of Alphabet Corporation reported bonds outstanding with a face value of $6,000,000 and a related unamortized premium of $180,000. Interest is payable semiannually on January 1 and July 1. Prepare an entry in journal form without explanation on January 1, 2018, to record the conversion of bonds with a face value of $2,400,000 into common stock. Each $1,000 bond is convertible into 30 shares of $20 par value common stock. (6]
Blue Corporation issued 2,100 $1,000 bonds at 103. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling in the market at 98, and the warrants had a market price of $41.Use the proportional method to record the issuance of the bonds and warrants. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round your answers to 0 decimal places, e.g. 5,125.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount
Moss Co. issued $690,000 of four-year, 12% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. Determine the present value of the bonds payable:
Crane Limited had $2.39 million of bonds payable outstanding and the unamortized premium for these bonds amounted to $44,600. Each $1,000 bond was convertible into 20 preferred shares. All bonds were then converted into preferred shares. The Contributed Surplus - Conversion Rights account had a balance of $21,500. Assume that the company follows IFRS. a. Assuming that the book value method was used, what entry would be made? Account Titles and Explanation Debit Credit b. Assume that Crane Ltd. offers $9,000 to induce early conversion. What journal entry would be made? Account Titles and Explanation Debit Credit
Crane Limited had $2.39 million of bonds payable outstanding and the unamortized premium for these bonds amounted to $44,600. Each $1,000 bond was convertible into 20 preferred shares. All bonds were then converted into preferred shares. The Contributed Surplus - Conversion Rights account had a balance of $21,500. Assume that the company follows IFRS. a. Assuming that the book value method was used, what entry would be made? Account Titles and Explanation Debit Credit b. Assume that Crane Ltd. offers $9,000 to induce early conversion. What journal entry would be made? Account Titles and Explanation Debit Credit
A company issued 8%, 15-year bonds with a par value of $470,000 that pay interest semiannually. The market rate on the date of issuance was 8%. The journal entry to record each semiannual interest payment is: Multiple Choice Debit Bond Interest Expense $18,800; credit Cash $18,800. Debit Bond Interest Expense $37,600; credit Cash $37,600. Debit Bond Interest Payable $31,333; credit Cash $31,333. Debit Bond Interest Expense $420,000; credit Cash $420,000. No entry is needed, since no interest is paid until the bond is due. MacBook Air
Sunland Corporation issued 6,000, five year, 3% bonds at 103 on January 1, 2023. Interest is paid annually. Each $1,000 bond carried one detachable warrant allowing the holder to purchase 100 common shares in Sunland at $9 per share, the price at which Sunland shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 6%. On June 30, 2023, 1,200 of the bond holders exercised the options to buy the shares. Prepare the journal entries to record these events. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places eg. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date January 1, 2023 June 30, 2023 Account Titles and…
On December 1, 2021, Bramble Corp.issued 680 of its 8%, $1,000 bonds at 104. Attached to each bond was one detachable stock warrant entitling the holder to purchase 1 share of Bramble's common stock. On December 1, 2021, the market value of the bonds, without the stock warrants, was 97, and the market value of each stock purchase warrant was $50. The amount of the proceeds from the issuance that should be accounted for as the initial carrying value of the bonds payable would be $700,400 O $680,000 $672,533 $665,380
Hoffman Corporation issued $60 million of 8%, 20-year bonds at 105. Each of the 60,000 bonds was issued with 13 detachable stock warrants, each of which entitled the bondholder to purchase, for $26, one share of $1 par common stock. At the time of sale, the market value of the common stock was $31 per share and the market value of each warrant was $5. Prepare the journal entry to record the issuance of the bonds.
At the beginning of the current year, ABC Corporation issued 6,000, 5-year bonds, face value 1,000 each at 105. The bonds has a conversion privilege that provides for an exchange of a 1,000 bond for 20 shares of capital, par 50. Without such conversion privilege, the bonds would only sell at 98. Prepare the entries in connection with the issuance of the bonds and the conversion of the bonds at the end of the current year. U :=
Blend Inc. issued 500, $1,000 bonds at 102. Each bond was issued with two detachable stock warrants. After issuance, the bonds were selling in the market at 97. a. Assume the warrants had a market value of $35 each after issuance. Under the proportional method, the journal entry to record the issuance of the bonds and warrants includes a debit to Discount on Bonds Payable of? b. Assume that after issuance, the market price of the warrants, without the bonds, cannot be determined. Under the incremental method, the journal entry to record the issuance of the bonds and warrants includes a debit to Discount on Bonds Payable of? Please avoid solutions image based thenx

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