On April 1, 2021, ABC Corporation issued $340,000 of 15% bonds at 107. Each $1,000 bond was sold with 40 detachable stock warrants, each permitting the investor to purchase one share of common stock for $18. On that date, the market value of the common stock was $16 per share and the market value of each warrant was $2. Required: Prepare the journal entry for the issue of the bonds.

On April 1, 2021, ABC Corporation issued $340,000 of 15% bonds at 107. Each $1,000 bond was sold with 40 detachable stock warrants, each permitting the investor to purchase one share of common stock for $18. On that date, the market value of the common stock was $16 per share and the market value of each warrant was $2. Required: Prepare the journal entry for the issue of the bonds.

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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