Shurwood Ltd. issued 5,130,000 6%, 10-year, nonconvertible bonds with detachable warrants for $5,250,000. Shortly after issuance, the warrants trade for $309,000 in total, and the bonds were trading at 80, or $5,060,000, ex-warrants (i.e., without warrants attached). Required: 1. Provide the journal entry to record the transactions. 2. Provide the journal entry to record the first payment of interest on the convertible bond assuming that the bonds pay interest annually. Effective interest rate is 6.50%

Shurwood Ltd. issued 5,130,000 6%, 10-year, nonconvertible bonds with detachable warrants for $5,250,000. Shortly after issuance, the warrants trade for $309,000 in total, and the bonds were trading at 80, or $5,060,000, ex-warrants (i.e., without warrants attached). Required: 1. Provide the journal entry to record the transactions. 2. Provide the journal entry to record the first payment of interest on the convertible bond assuming that the bonds pay interest annually. Effective interest rate is 6.50%

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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