$100 par value bond. At the time of issuance, the warrants were selling for $5. Skysong has adopted ASPE. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. 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.) Account Titles and Explanation Option 1: Residual Method Cash Bonds Payable Contributed Surplus - Stock Warrants Option 2: Value Equity component at zero Cash Bonds Payable Debit 35640000 33840000 Credit 33840000 1800000 33840000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
-
Your answer is partially correct.
Skysong Limited issued $36,000,000 of par value, 6% bonds at 99. One detachable stock purchase warrant was issued with each
$100 par value bond. At the time of issuance, the warrants were selling for $5. Skysong has adopted ASPE. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. 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.)
Account Titles and Explanation
Option 1: Residual Method
Cash
Bonds Payable
Contributed Surplus - Stock Warrants
Option 2: Value Equity component at zero
Cash
Bonds Payable
Debit
35640000
33840000
Credit
33840000
1800000
33840000
Transcribed Image Text:- Your answer is partially correct. Skysong Limited issued $36,000,000 of par value, 6% bonds at 99. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $5. Skysong has adopted ASPE. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. 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.) Account Titles and Explanation Option 1: Residual Method Cash Bonds Payable Contributed Surplus - Stock Warrants Option 2: Value Equity component at zero Cash Bonds Payable Debit 35640000 33840000 Credit 33840000 1800000 33840000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Accounting for Long-term liabilities
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education