Bramble Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Bramble Corp. has issued 17,000 units. Each unit consists of a $1,020 par value, 12% subordinated debenture and 17 shares of $9 par common stock. The units were sold to outside investors for cash at $1,496 per unit. Prior to this sale, the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Bramble's transaction, under the following conditions. (List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to O decimal places, e.g. 38,487. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) 1. Employing the incremental method. Employing the proportional method, assuming the recent price quote on the common stock reflects fair value. 2.
Bramble Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Bramble Corp. has issued 17,000 units. Each unit consists of a $1,020 par value, 12% subordinated debenture and 17 shares of $9 par common stock. The units were sold to outside investors for cash at $1,496 per unit. Prior to this sale, the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Bramble's transaction, under the following conditions. (List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to O decimal places, e.g. 38,487. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) 1. Employing the incremental method. Employing the proportional method, assuming the recent price quote on the common stock reflects fair value. 2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Bramble Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ.
Bramble Corp. has issued 17,000 units. Each unit consists of a $1,020 par value, 12% subordinated debenture and 17 shares of $9 par
common stock. The units were sold to outside investors for cash at $1,496 per unit. Prior to this sale, the 2-week ask price of common
stock was $40 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is
equal to the fair value.
(a) Prepare the journal entry to record Bramble's transaction, under the following conditions. (List all debit entries before credit entries.
Do not round intermediate calculations. Round final answers to O decimal places, e.g. 38,487. Credit account titles are automatically indented
when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
1. Employing the incremental method.
Employing the proportional method, assuming the recent price quote on the common stock reflects fair value.
2.
No. Account Titles and Explanation
1.
Cash
Debit
25432000
Credit
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