Headland Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ (National Association of Securities Dealers Quotes). Headland Corp. has issued 10,000 units. Each unit consists of a 12% subordinated debenture and 10 shares of $5 par common stock. The units were sold to outside investors for cash at $855 per unit. Prior to this sale the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable mark the debentures, and therefore the par value of the bonds is equal to the fair value. a) Prepare the journal entry to record Headland' transaction, under the following conditions: (Round answers to O decimal place, e.g. 38,487. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is n select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quotes on the common stock reflects fair value.

Headland Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ (National Association of Securities Dealers Quotes). Headland Corp. has issued 10,000 units. Each unit consists of a 12% subordinated debenture and 10 shares of $5 par common stock. The units were sold to outside investors for cash at $855 per unit. Prior to this sale the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable mark the debentures, and therefore the par value of the bonds is equal to the fair value. a) Prepare the journal entry to record Headland' transaction, under the following conditions: (Round answers to O decimal place, e.g. 38,487. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is n select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quotes on the common stock reflects fair value.

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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