Case D. Miller Bikes is a national chain of upscale bicycle shops. The company has followed a successful strategy of locating near major universities. Miller has the opportunity to expand into several new markets but must raise additional capital. The company has engaged in the following transactions: Issued 45,000 additional shares of common stock. The stock has a $1 par value. The shares sold for $25 per share. Issued bonds. These bonds have a face value of $1,000,000 and a coupon rate of 10 percent. The bonds mature in 10 years and pay interest semiannually. When the bonds were issued, the annual market rate of interest was 8 percent. Required: 1. Record the sale of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. Record the issuance of the stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Case D. Miller Bikes is a national chain of upscale bicycle shops. The company has followed a successful strategy of locating near major universities. Miller has the opportunity to expand into several new markets but must raise additional capital. The company has engaged in the following transactions: Issued 45,000 additional shares of common stock. The stock has a $1 par value. The shares sold for $25 per share. Issued bonds. These bonds have a face value of $1,000,000 and a coupon rate of 10 percent. The bonds mature in 10 years and pay interest semiannually. When the bonds were issued, the annual market rate of interest was 8 percent. Required: 1. Record the sale of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. Record the issuance of the stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A 101.
![B
C
Required information
[The following information applies to the questions displayed below.]
Treat each case as being independent from the other cases. (FV of $1. PV of $1. EVA of $1. and PVA of $1) (Use the
appropriate factor(s) from the tables provided.)
Case D. Miller Bikes is a national chain of upscale bicycle shops. The company has followed a successful strategy of locating near
major universities. Miller has the opportunity to expand into several new markets but must raise additional capital. The company has
engaged in the following transactions:
• Issued 45,000 additional shares of common stock. The stock has a $1 par value. The shares sold for $25 per share.
Issued bonds. These bonds have a face value of $1,000,000 and a coupon rate of 10 percent. The bonds mature in 10 years and pay
interest semiannually. When the bonds were issued, the annual market rate of interest was 8 percent.
Required:
1. Record the sale of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first
account field.)
2. Record the issuance of the stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first
account field.)
View transaction list
Transaction
1a
16
02
Cash
Bonds payable
Premium on bonds payable
Cash
Bonds payable
General Journal
Cash
300
00
SE
Debit
1,135,903
Credit
1,000,000
135,903](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe42d6f28-4b0c-488f-a318-3a22fcef86c1%2Fec9637a9-6a65-42ab-8c10-2216b9307079%2F8a0w3p_processed.png&w=3840&q=75)
Transcribed Image Text:B
C
Required information
[The following information applies to the questions displayed below.]
Treat each case as being independent from the other cases. (FV of $1. PV of $1. EVA of $1. and PVA of $1) (Use the
appropriate factor(s) from the tables provided.)
Case D. Miller Bikes is a national chain of upscale bicycle shops. The company has followed a successful strategy of locating near
major universities. Miller has the opportunity to expand into several new markets but must raise additional capital. The company has
engaged in the following transactions:
• Issued 45,000 additional shares of common stock. The stock has a $1 par value. The shares sold for $25 per share.
Issued bonds. These bonds have a face value of $1,000,000 and a coupon rate of 10 percent. The bonds mature in 10 years and pay
interest semiannually. When the bonds were issued, the annual market rate of interest was 8 percent.
Required:
1. Record the sale of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first
account field.)
2. Record the issuance of the stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first
account field.)
View transaction list
Transaction
1a
16
02
Cash
Bonds payable
Premium on bonds payable
Cash
Bonds payable
General Journal
Cash
300
00
SE
Debit
1,135,903
Credit
1,000,000
135,903
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