Corporation is a regional company which is an SEC registrant. TheCorp. has issued 20,000 units.Each unit consists of a $1,560 par value, 12% subordinated debenture and 20 shares of$10 par common stock. The units were sold to outside investors for cash at $1,848 perunit. Prior to this sale, the 2-week ask price of common stock was $52 per share. Twelvepercent is a reasonable market yield for the debentures, and therefore the par value ofthe bonds is equal to the fair value.corporation's securities are thinly traded on NASDAQ.(a) Prepare the journal entry to record Corp.'s transaction, under the followingconditions.List all debit entries before credit entries. Do not round intermediate calculations.Round final answers to 0 decimal places.1. Employing the incremental method.2. Employing the proportional method, assuming the recent price quote on thecommon stock reflects fair value.No. Account Titles and ExplanationDebitCredit2.

Incremental MethodJournal Entry:Proportional MethodJournal Entry:Explanation Incremental Method The…

Answered: Corporation is a regional company which…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Riverbed Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Riverbed Corp. has issued 17,000 units. Each unit consists of a $850 par, 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 $68 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 Riverbed'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…
Ehrlich Corporation's common stock had a $10 par value and the preferred stock had a $50 par value. Journalize the following independent transactions: a. Issued 600 shares of common stock for equipment. The equipment had been appraised at $7,100; the seller's book value was $6,200. The most recent market price of the common stock is $16 a share. b. Issued 375 shares of common and 100 shares of preferred for a lump sum amounting to $10,800. The common had been selling at $14 and the preferred at $65. c. Issued 200 shares of common and 50 shares of preferred for equipment. The common had a fair value of $16 per share; the equipment has a fair value of $6,500.
Meman
Eagle Security Co. has just gone public. Under a firm commitment agreement, the firm received $36.50 for each of the 7.25 million shares sold. The initial offering price was $38.75 per share, and the stock rose to $42.65 per share in the first few minutes of trading. The firm paid $2,285,000 in direct legal and other costs and $988,000 in indirect costs. What was the underwriters' spread of this offer?
Rahul
Oriole Corporation earned $474,360 during a period when it had an average of 118,000 common shares outstanding. The common shares sold at an average market price of $25 per share during the period. Also outstanding were 17,400 warrants that could each be exercised to purchase one common share for $10.
Filer Manufacturing has 5,766,872 shares of common stock outstanding. The current share price is $36.05, and the book value per share is $7.08. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $64,298,817, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $48,100,600, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par. The most recent dividend was $2.78 and the dividend growth rate is 0.05. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 0.35. What is Filer's aftertax cost of debt? Enter the answer with 4 decimals (e.g. 0.2345)
Umbrella Corp.'s common stock currently is selling at $23 per share. There are 180,000\\noutstanding shares of common stock. Umbrella Corp also has 50,000 outstanding preferred\\nshares that are currently selling at $35 per share. Umbrella Corp also has issued 5,000 bonds\\nwhich are each currently selling at $968. The cost of capital for Umbrella Corp. is 13% for its\\ncommon stock, 10% for its preferred shares, and 8% for its bonds. Given it has a tax rate of 30%, \ \nwhat is Umbrella Corp.'s adjusted weighted-average cost of capital?
Filer Manufacturing has 5,321,196 shares of common stock outstanding. The current share price is $52.83, and the book value per share is $9.19. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $43,973,360, has a 0.05 coupon, matures in 12 years and sells for 93 percent of par. The second issue has a face value of $50,007,464, has a 0.07 coupon, matures in 20 years, and sells for 89 percent of par. What is Filer's weight of debt on a market value basis? Enter the answer with 4 decimals (e.g. 0.2345)
1
Enscoe Enterprises, Incorporated (EEI) has 280,000 shares authorized, 250,000 shares issued, and 20,000 shares of treasury stock. At this point, EEI has $2,120,000 of assets. $280,000 liabilities, $540,000 of common stock, and $1,300,000 of retained earnings. Further, assume that the market value of EEI's common stock is $10 per share. Required
LaForge North America has authorized 200,000 shares of $7 par common stock. If they sell 10,000 shares of stock for $10 per share, what is the journal entry to record the sale?

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