Wildhorse Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Wildhorse Corp. has issued  11,000 units. Each unit consists of a $ 550 par, 12% subordinated debenture and  11 shares of $ 6 par common stock. The units were sold to outside investors for cash at $ 968 per unit. Prior to this sale, the 2-week ask price of common stock was $ 44 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Wildhorse’ s transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. 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.) (1)   Employing the incremental method. (2)   Employing the proportional method, assuming the recent price quote on the common stock reflects fair value.   No. Account Titles and Explanation Debit Credit 1. 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 2. 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   enter an account title enter a debit amount enter a credit amount

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Wildhorse Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Wildhorse Corp. has issued  11,000 units. Each unit consists of a $ 550 par, 12% subordinated debenture and  11 shares of $ 6 par common stock. The units were sold to outside investors for cash at $ 968 per unit. Prior to this sale, the 2-week ask price of common stock was $ 44 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value.

(a) Prepare the journal entry to record Wildhorse’ s transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. 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.)

(1)   Employing the incremental method.
(2)   Employing the proportional method, assuming the recent price quote on the common stock reflects fair value.

 

No.
Account Titles and Explanation
Debit
Credit
1.
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
2.
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
 
enter an account title
enter a debit amount
enter a credit amount
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