Naomi, Inc. issues $8,000,000 of bonds with a coupon rate of 8%. To help the sale, detachable stock warrants are issued at the rate of ten warrants for each $1,000 bond sold. It is estimated that the value of the bonds without the warrants is $7,850,000 and the value of the warrants is $415,000. The bonds with the warrants sold at $8,150,000. Required: Prepare the journal entry Naomi, Inc. should make to record the bonds.
Naomi, Inc. issues $8,000,000 of bonds with a coupon rate of 8%. To help the sale, detachable stock warrants are issued at the rate of ten warrants for each $1,000 bond sold. It is estimated that the value of the bonds without the warrants is $7,850,000 and the value of the warrants is $415,000. The bonds with the warrants sold at $8,150,000. Required: Prepare the journal entry Naomi, Inc. should make to record the bonds.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- Naomi, Inc. issues $8,000,000 of bonds with a coupon rate of 8%. To help the sale, detachable stock warrants are issued at the rate of ten warrants for each $1,000 bond sold. It is estimated that the
value of the bonds without the warrants is $7,850,000 and the value of the warrants is $415,000. The bonds with the warrants sold at $8,150,000.
Required:
Prepare the
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