Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $136,000, and the value of the warrants in the market is $24,000. The bonds sold in the market at issuance for $152,000. (a) What entry should be made at the time of the issuance of the bonds and warrants? (List debit entry before credit entry. 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 o for the amounts. Round intermediate calculations to 5 decimal places, e.g. 1.24687 and final answers to 0 decimal places, e.g. 5,125.) Account Titles and Explanation Debit Credit Debit III (b1) Prepare the entry if the warrants were nondetachable. (List all debit entries before credit entries. 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 o for the amounts. Do not round intermediate calculations. Round answers to O decimal places, e.g. 5,125.) Account Titles and Explanation Credit
Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $136,000, and the value of the warrants in the market is $24,000. The bonds sold in the market at issuance for $152,000. (a) What entry should be made at the time of the issuance of the bonds and warrants? (List debit entry before credit entry. 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 o for the amounts. Round intermediate calculations to 5 decimal places, e.g. 1.24687 and final answers to 0 decimal places, e.g. 5,125.) Account Titles and Explanation Debit Credit Debit III (b1) Prepare the entry if the warrants were nondetachable. (List all debit entries before credit entries. 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 o for the amounts. Do not round intermediate calculations. Round answers to O decimal places, e.g. 5,125.) Account Titles and Explanation Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of bonds with a coupon rate of 10%. In discussions with
investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one
warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $136,000, and the value of the
warrants in the market is $24,000. The bonds sold in the market at issuance for $152,000.
(a) What entry should be made at the time of the issuance of the bonds and warrants? (List debit entry before credit entry. 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 o for the amounts. Round intermediate calculations to 5 decimal places, e.g. 1.24687 and final answers to O decimal places, e.g.
5,125.)
Account Titles and Explanation
Debit
Credit
(b1) Prepare the entry if the warrants were nondetachable. (List all debit entries before credit entries. 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 O for the
amounts. Do not round intermediate calculations. Round answers to O decimal places, e.g. 5,125.)
Account Titles and Explanation
Debit
Credit
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