Your answer is partially correct. BDM Corporation issued 1,200, ten year, 7% bonds for 105 on January 1, 2023. Interest is paid annually. Each $500 bond carried a detachable warrant allowing the holder to purchase 210 common shares in BDM at $15 per share, the price at which BD shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 8%. On June 30, 2023, 180 of the bond holders exercised the options to buy the shares. Prepare the journal entries to record these events. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to 0 decimal places eg. 58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amoun Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Date January 1, 2023 v June 30, 2023 V Cash Bonds Payable Contributed Surplus- Stock Warrants Cash Contributed Surplus Stock Warrants Common Shares Debit 630,000 567,000 Credit 100000 600000 30000 37,800 529,200

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Question 7 of 10
Your answer is partially correct.
BDM Corporation issued 1,200, ten year, 7% bonds for 105 on January 1, 2023. Interest is paid annually. Each $500 bond carried a detachable warrant allowing the holder to purchase 210 common shares in BDM at $15 per share, the price at which BDM
shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 8%. On June 30, 2023, 180 of the bond holders exercised the options to buy the shares.
Prepare the journal entries to record these events. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places eg. 58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.
Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)
Date
January 1, 2023
June 30, 2023
V
Account Titles and Explanation
Cash
Bonds Payable
Contributed Surplus-Stock Warrants
Cash
Contributed Surplus-Stock Warrants
Common Shares
Debit
630,000
567,000
W
Credit
600000
30000
37,800
529,200
Transcribed Image Text:Question 7 of 10 Your answer is partially correct. BDM Corporation issued 1,200, ten year, 7% bonds for 105 on January 1, 2023. Interest is paid annually. Each $500 bond carried a detachable warrant allowing the holder to purchase 210 common shares in BDM at $15 per share, the price at which BDM shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 8%. On June 30, 2023, 180 of the bond holders exercised the options to buy the shares. Prepare the journal entries to record these events. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places eg. 58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date January 1, 2023 June 30, 2023 V Account Titles and Explanation Cash Bonds Payable Contributed Surplus-Stock Warrants Cash Contributed Surplus-Stock Warrants Common Shares Debit 630,000 567,000 W Credit 600000 30000 37,800 529,200
Expert Solution
steps

Step by step

Solved in 3 steps with 2 images

Blurred answer
Knowledge Booster
Earning per share and Dilutive securities
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education