Please avoid solutions image based thankx On May 1, 2025, Metlock Company issued 2,100 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant.Shortly after issuance, the bonds were selling at 97, but the fair value of the warrants cannot be determined.a. Prepare the entry to record the issuance of the bonds and warrants. (List debit entry before credit entry. Credit account titles areautomatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles andenter o for the amounts.)Account Titles and ExplanationCashDiscount on Bonds PayableBonds PayablePaid-in Capital-Stock WarrantsDebit2100000CreditIb. Assume the same facts as part (a), except that the warrants had a fair value of $31. Prepare the entry to record the issuance of thebonds and warrants. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Donot indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Do not round intermediatecalculations, Round answers to O decimal places, e.g. 5,125.)

The bonds are generally issued by the government or corporation to raise money. The bonds are…

On May 1, 2025, Metlock Company issued 2,100 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Shortly after issuance, the bonds were selling at 97, but the fair value of the warrants cannot be determined.

On May 1, 2025, Metlock Company issued 2,100 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Shortly after issuance, the bonds were selling at 97, but the fair value of the warrants cannot be determined.

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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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Please avoid solutions image based thankx

On May 1, 2025, Metlock Company issued 2,100 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant.
Shortly after issuance, the bonds were selling at 97, but the fair value of the warrants cannot be determined.
a. Prepare the entry to record 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.)
Account Titles and Explanation
Cash
Discount on Bonds Payable
Bonds Payable
Paid-in Capital-Stock Warrants
Debit
2100000
Credit
I
b. Assume the same facts as part (a), except that the warrants had a fair value of $31. Prepare the entry to record the issuance of the
bonds and warrants. (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.)

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