Provide solution On March 1, 2016, E Corp. issued $1,500,000 of 15%nonconvertible bonds at 105, due on February 28, 2026.Each $1,000 bond was issued with 45 detachable stockwarrants, each of which entitled the holder to purchase,for $65, one share of Evan's $40 par common stock. OnMarch 1, 2016, the market price of each warrant was $5. Bywhat amount should the bond issue proceeds increaseshareholders' equity?A. $75,000B. $337,500C. $363,500D. $0

Step 1: Define Stock WarrantsCorporations issue stock warrants that give the investors the right to…

Answered: On March 1, 2016, E Corp. issued…

Principles of Accounting Volume 1

19th Edition

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Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EB: Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market...

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Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?
On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be converted into 20 shares of the companys 5 par value stock. On July 3, 2020, when the bonds had an unamortized discount of 7,400 and the market value of the McGraw shares was 52 per share, all the bonds were converted into common stock. Required: 1. Prepare the journal entry to record the conversion of the bonds under (a) the book value method and (b) the market value method. 2. Compute the companys debt-to-equity ratio (total liabilities divided by total shareholders equity, as described in Chapter 6) under each alternative. Assume the companys other liabilities are 2 million and shareholders equity before the conversion is 3 million. 3. Assume the company uses IFRS and issued the bonds for 487,500 on July 2, 2018. On this date, it determined that the fair value of each bond was 930 and the fair value of the conversion option was 45 per bond. Prepare the journal entry to record the issuance of the bonds.
Naval Inc. issued $200,000 face value bonds at a discount and received $190,000. At the end of 2018, the balance in the Discount on Bonds Payable account is $5,000. This years balance sheet will show a net liability of ________. A. $200,000 B. $180,000 C. $195,000 D. $205,000
On January 1, 2016, Cooper Corporation issued $800,000 of 12.5% bonds due January 1, 2023, at 102. The bonds pay interest semiannually on June 30 and December 31. Each $1,000 bond carried 10 warrants which allowed the acquired to exchange 1 share of $10 par common stock for $50. Sometime after the bonds were issued the bonds were quoted at 98 ex-rights and each individual warrant was quoted at $5. Subsequently, on April 30, 2017, 2,000 rights were exercised. Required: 1. Prepare the journal entry to record the bond issue. 2. Prepare the journal entries on April 30, 2017, to record the exchange of the warrants for common shares.
On July 1, 2017, Roberts Corporation issued $3,000,000 of9% bonds payable in 20 years. The bonds include detachablewarrants giving the bondholder the right to purchasefor $30 one share of $1 par value common stock atany time during the next 10 years. The bonds were soldfor $3,000,000. The value of the warrants at the time ofissuance was $100,000. Prepare the journal entry to recordthis transaction.
On January 1, 2016, Case Company issued P5,000,000 of 12% nonconvertible bonds at 103 which are due on February 28, 2021. In addition, each P1,000 bond was issued with 30 detachable share warrants, each of which entitled the bondholder to purchase, for P 50, one ordinary share of Case Company, par value P25. On January 1, 2016m the quoted market value of each warrant was P4. The market value of the bonds ex-warrants at the time of issuance is 95. What is the carrying amount of the bonds payable on January 1, 2016? 5,000,000 4,750,000 5,150,000 4,550,000 What amount of the proceeds from the bond issue should be recognized as an increase in shareholders’ equity? 600,000 300,000 200,000 400,000
The Colson Company issued $300.000 of 10% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1, and January 1. The bonds are issued at face value. Prepare Colson's Journal entry for the July 1 lnterest Payment. O Cash $15.000 Interest Expense O nterest Expense Cash $15.000 $15.000 $15.000 O nterest Expense $15.000 Onterest Payable O None of the above $15.000
On March 1, 2021, E Corp. issued $1,000,000 of 10% nonconvertible bonds at 104, due on February 28, 2031. Each $1,000 bond was issued with 50 detachable stock warrants, each of which entitled the holder to purchase, for $60, one share of Evan's $30 par common stock. On March 1, 2021, the market price of each warrant was $4. By what amount should the bond issue proceeds increase shareholders' equity?
On April 1, 2016, Lanz Company issued at 99 plus accrued interest, 200 of its 8%, P 1,000 bonds. The bonds are dated January 1, 2016, mature on January 1, 2026, and pay interest on July 1 and January 1. Lanz paid bond issue costs of P7,000. From the bond issuance, Lanz received net cash of –
How much from the proceeds is assigned to the equity on the date of issuance?
The Gorman Group issued $900,000 of 13% bonds on June 30, 2016, for $967,707. The bonds were dated on June 30 and mature on June 30, 2036 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually on December 31 and June 30. Required: 1. Prepare the journal entry to record their issuance by The Gorman Group on June 30, 2016. 2. Prepare the journal entry to record interest on December 31, 2016 (at the effective rate). 3. Prepare the journal entry to record interest on June 30, 2017 (at the effective rate).

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