Hoffman Corporation issued $60 million of 8%, 20-year bonds at 105. Each of the 60,000 bonds was issued with 13 detachable stock warrants, each of which entitled the bondholder to purchase, for $26, one share of $1 par common stock. At the time of sale, the market value of the common stock was $31 per share and the market value of each warrant was $5. Prepare the journal entry to record the issuance of the bonds.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Hoffman Corporation issued $60 million of 8%, 20-year bonds at 105. Each of the 60,000 bonds was
issued with 13 detachable stock warrants, each of which entitled the bondholder to purchase, for $26,
one share of $1 par common stock. At the time of sale, the market value of the common stock was $31 per
share and the market value of each warrant was $5.
Prepare the journal entry to record the issuance of the bonds.
Transcribed Image Text:Hoffman Corporation issued $60 million of 8%, 20-year bonds at 105. Each of the 60,000 bonds was issued with 13 detachable stock warrants, each of which entitled the bondholder to purchase, for $26, one share of $1 par common stock. At the time of sale, the market value of the common stock was $31 per share and the market value of each warrant was $5. Prepare the journal entry to record the issuance of the bonds.
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