Anteater Company issued 200 bonds, each with a face amount of $1,000,with detachable stock warrants at 102. Each warrant entitled its holder toacquire two shares of $100 par common stock for $125 per share. Throughdiscussion with investment bankers, it is determined that the bonds wouldsell for 98 without the warrants. The market value of each warrant is $45.Instructions:A. Record the issuance of the bonds.B. Record the entry necessary assuming half of the warrants are exercised.C. Record the entry necessary assuming the remaining warrants after theexercise in B. above expire before being exercised.

Answered: Image /qna-images/answer/3b6b0c9a-fed1-4ac9-904e-49969957d1c1.jpg

sell for 98 without the warrants. The market value of each warrant is $45. Instructions: A. Record the issuance of the bonds. B. Record the entry necessary assuming half of the warrants are exercised. C. Record the entry necessary assuming the remaining warrants after the exercise in B. above expire before being exercised.

sell for 98 without the warrants. The market value of each warrant is $45. Instructions: A. Record the issuance of the bonds. B. Record the entry necessary assuming half of the warrants are exercised. C. Record the entry necessary assuming the remaining warrants after the exercise in B. above expire before being exercised.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A $920,000 bond issue on which there is an unamortized premium of $65,000 is redeemed for $821,000. Journalize the redemption of the bonds. If an amount box does not require an entry, leave it blank.
Requirement 1. Determine the present value of 10-year bonds payable with face value of $93,000 and stated interest rate of 12%, paid semiannually. The market rate of interest is 12% at issuance. (Round intermediary calculations and final answer to the nearest whole dollar.) 1. Determine the present value of 10-year bonds payable with face value of $93,000 and stated interest rate of 12%,paid semiannually. The market rate of interest is 12%at issuance. 2. Same bonds payable as in Requirement 1, but the market interest rate is 16%. 3. Same bonds payable as in Requirement 1, but the market interest rate is 8%.
A $545,000 bond issue on which there is an unamortized discount of $37,000 is redeemed for $472,000. Journalize the redemption of the bonds.If an amount box does not require an entry, leave it blank.
Blue Corporation issued 2,100 $1,000 bonds at 103. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling in the market at 98, and the warrants had a market price of $41.Use the proportional method to record the issuance of the bonds and warrants. (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 0 for the amounts. Round your answers to 0 decimal places, e.g. 5,125.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount
B4.
Present entries to record the selected transactions described below: a. Issued $2,750,000 of 10-year, 8% bonds at 97. If an amount box does not require an entry, leave it blank. b. Amortized bond discount for a full year, using the straight-line method. If an amount box does not require an entry, leave it blank. c. Called bonds at 98. Assume the bonds were carried at $2,692,250 at the time of the redemption. If an amount box does not require an entry, leave it blank.
Vikrambahi
Compute bond proceeds, amortizing premium by interest method, and interest expense DATA Face amount of bonds Contract rate of interest Term of bonds, years Market rate of interest Interest payment REQUIRED: a. Compute the amount of cash proceeds from the sale of the bonds. $41,000,000 11% 3 9% Semiannual b. Compute the amount of premium to be amortized for the first semiannual interest payment period, using the interest method. c. Compute the amount of premium to be amortized for the second semiannual interest payment period, using the interest method. d. Compute the amount of the bond interest expense for the first year. Using formulas and cell references from the problem data, perform the required analysis. Formulas entered in the green cells show in the orange cells. Transfer amounts to CNOWv2 for grading. a. PV of cash proceeds b. Premium amortized for the 1st interest payment period c. Premium amortized for the 2nd interest payment period d. Interest expense for the 1st year…
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
On May 1, 2020, Stellar Company issued 1,900 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Shortly after issuance, the bonds were selling at 98, but the fair value of the warrants cannot be determined.(a) Prepare the entry to record the issuance of the bonds and warrants. (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 0 for the amounts.) (b) Assume the same facts as part (a), except that the warrants had a fair value of $25. Prepare the entry to record the issuance of the bonds and warrants. (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 0 for the amounts. Round intermediate calculations to 5 decimal places, e.g. 1.24687 and final answers to 0 decimal places, e.g. 5,125.)
A $319,000 bond was redeemed at 104 when the carrying value of the bond was $344,000. The entry to record the redemption would include a a.loss on bond redemption of $12,240. b.gain on bond redemption of $25,000. c.loss on bond redemption of $25,000. d.gain on bond redemption of $12,240.