Concord Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Concord Corp. has issued 12,500 units. Each unit consists of a $ 625 par, 12% subordinated debenture and 13 shares of $ 6 par common stock. The units were sold to outside investors for cash at $ 1,100 per unit. Prior to this sale, the 2-week ask price of common stock was $ 50 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 Concord’ s transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. 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.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quote on the common stock reflects fair value.
Concord Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Concord Corp. has issued 12,500 units. Each unit consists of a $ 625 par, 12% subordinated debenture and 13 shares of $ 6 par common stock. The units were sold to outside investors for cash at $ 1,100 per unit. Prior to this sale, the 2-week ask price of common stock was $ 50 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par
(a) Prepare the
| (1) | Employing the incremental method. | |
| (2) | Employing the proportional method, assuming the recent price quote on the common stock reflects fair value. |
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