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Violet Corporation issues 1,200 shares of $150 par value preferred stock at a price of $200 per share on December 31. It attaches a warrant to each share of stock that allows the holder to purchase one share of $20 par common stock at $50 per share. Required: Given that the portion of the proceeds attributable to the preferred stock totals $230,303 and the portion attributable to the common stock warrants totals $9,697, what joumal entry would Violet make to allocate the $240,000 ($200 x 1,200) issuance price?

Violet Corporation issues 1,200 shares of $150 par value preferred stock at a price of $200 per share on December 31. It attaches a warrant to each share of stock that allows the holder to purchase one share of $20 par common stock at $50 per share. Required: Given that the portion of the proceeds attributable to the preferred stock totals $230,303 and the portion attributable to the common stock warrants totals $9,697, what joumal entry would Violet make to allocate the $240,000 ($200 x 1,200) issuance price?

FINANCIAL ACCOUNTING
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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Violet Corporation issues 1,200 shares of $150 par value preferred stock at a price of $200 per share on December 31. It attaches a warrant to each share of stock that allows the holder to purchase one share of $20 par common stock at $50 per share. Required: Given that the portion of the proceeds attributable to the preferred stock totals $230,303 and the portion attributable to the common stock warrants totals $9,697, what joumal entry would Violet make to allocate the $240,000 ($200 x 1,200) issuance price?
Transcribed Image Text:Violet Corporation issues 1,200 shares of $150 par value preferred stock at a price of $200 per share on December 31. It attaches a warrant to each share of stock that allows the holder to purchase one share of $20 par common stock at $50 per share. Required: Given that the portion of the proceeds attributable to the preferred stock totals $230,303 and the portion attributable to the common stock warrants totals $9,697, what joumal entry would Violet make to allocate the $240,000 ($200 x 1,200) issuance price?
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