Continental container corp. has decided to raise additional capital by issuing a $300,000 face-value of bonds with a coupon rate of 10%. in discussions with their investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of 10 warrants for each $1,000 bond sold. the value of the bonds without the warrants is considered to be $279,000, and the value of the warrants in the market is $10.3333 each. the bonds sold in the market at issuance and the company received $306,000 in cash. Required: Prepare the journal entry to record the issuance of the bonds and warrants.
Continental container corp. has decided to raise additional capital by issuing a $300,000 face-value of bonds with a coupon rate of 10%. in discussions with their investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of 10 warrants for each $1,000 bond sold. the value of the bonds without the warrants is considered to be $279,000, and the value of the warrants in the market is $10.3333 each. the bonds sold in the market at issuance and the company received $306,000 in cash. Required: Prepare the journal entry to record the issuance of the bonds and warrants.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Continental container corp. has decided to raise additional capital by issuing a $300,000 face-
it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of 10 warrants for each $1,000 bond sold.
the value of the bonds without the warrants is considered to be $279,000, and the value of the warrants in the market is $10.3333 each.
the bonds sold in the market at issuance and the company received $306,000 in cash.
Required:
Prepare the
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
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