Carla Corporation issued 3.500, five year, 3% bonds at 104 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 Carla at $10 per share, the price at which Carla shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 5%. On June 30, 2023, 700 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, eg 1.25124 and the final answer to 0 decimal places eg 58,971. Credit account titles are outomatically 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) count and Explanation Debit Credit
Carla Corporation issued 3.500, five year, 3% bonds at 104 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 Carla at $10 per share, the price at which Carla shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 5%. On June 30, 2023, 700 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, eg 1.25124 and the final answer to 0 decimal places eg 58,971. Credit account titles are outomatically 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) count and Explanation Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Ee 359.
Transcribed Image Text:Carla Corporation issued 3.500, five year, 3% bonds at 104 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 Carla at $10 per share, the price at which Carla shares
were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 5%. On June 30, 2023,700 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, eg. 1.25124 and the final
answer to 0 decimal places eg 58,971. Credit account titles are outomatically 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 Explanation
Canh
Bonds Payable
Contributed Surplus Stock Warrants
Contributed Surpha-Shock Options
Common Share
Debit
3640000
700000
59363
Credit
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education