Nichols Inc. issued 3,000 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Right after the issuance of the bonds, they were selling at market for 96. Additionally, the warrants had an overall market value of $70 each. A. Using the proportional method of allocation, prepare the journal entry to record the issuance of these bonds with the warrants. B. Using the incremental method of allocation assuming there was no market value provided for the warrants. Prepare the journal entry.

Nichols Inc. issued 3,000 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Right after the issuance of the bonds, they were selling at market for 96. Additionally, the warrants had an overall market value of $70 each. A. Using the proportional method of allocation, prepare the journal entry to record the issuance of these bonds with the warrants. B. Using the incremental method of allocation assuming there was no market value provided for the warrants. Prepare the journal entry.

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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