Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 14, Problem 14.29BE
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Use the incremental method to record the issuance of the bonds and warrants.
Blend Inc. issued 500, $1,000 bonds at 102. Each bond was issued with two detachable stock warrants. After issuance, the bonds were selling in the market at 97.
a. Assume the warrants had a market value of $35 each after issuance. Under the proportional method, the journal entry to record the issuance of the bonds and warrants includes a debit to Discount on Bonds Payable of?
b. Assume that after issuance, the market price of the warrants, without the bonds, cannot be determined. Under the incremental method, the journal entry to record the issuance of the bonds and warrants includes a debit to Discount on
Bonds Payable of?
Please avoid solutions image based thenx
Blanca Company has the following independent bond issuances.
a.) Issues $600,000 bonds at 96.
b.) Issues $700,000 bonds at 102.
c.) Issues $200,000 bonds at 100.
Required: 1.) Prepare the journal entries to record the bond issuances under of the independent situations.
Chapter 14 Solutions
Intermediate Accounting (2nd Edition)
Ch. 14 - What conditions or terms does a note payable...Ch. 14 - If the market rate of interest exceeds the face or...Ch. 14 - What is included in bond issue costs and how...Ch. 14 - Prob. 14.4QCh. 14 - When a bond is issued at a discount, will its...Ch. 14 - Prob. 14.6QCh. 14 - Prob. 14.7QCh. 14 - Under IFRS, how do firms account for convertible...Ch. 14 - Prob. 14.9QCh. 14 - Can companies reclassify short-term debt expected...
Ch. 14 - Under IFRS, can companies reclassify short-term...Ch. 14 - Do companies always reclassify long-term debt that...Ch. 14 - Prob. 14.13QCh. 14 - Prob. 14.14QCh. 14 - Prob. 14.15QCh. 14 - Prob. 14.16QCh. 14 - Prob. 14.1MCCh. 14 - Prob. 14.2MCCh. 14 - Prob. 14.3MCCh. 14 - Prob. 14.4MCCh. 14 - Prob. 14.5MCCh. 14 - Clothes Horse Corp. (CHC) Issued 500,000 bonds due...Ch. 14 - Prob. 14.7MCCh. 14 - Prob. 14.8MCCh. 14 - Prob. 14.9MCCh. 14 - Prob. 14.10MCCh. 14 - Prob. 14.11MCCh. 14 - Prob. 14.1BECh. 14 - Notes Payable. Using the information provided in...Ch. 14 - Prob. 14.3BECh. 14 - Prob. 14.4BECh. 14 - Prob. 14.5BECh. 14 - Prob. 14.6BECh. 14 - Bond Terminology. Match each term with its...Ch. 14 - Bond Pricing. Fill in the missing items for each...Ch. 14 - Prob. 14.9BECh. 14 - Bond Issue Price. Using the information from...Ch. 14 - Prob. 14.11BECh. 14 - Prob. 14.12BECh. 14 - Prob. 14.13BECh. 14 - Prob. 14.14BECh. 14 - Prob. 14.15BECh. 14 - Prob. 14.16BECh. 14 - Prob. 14.17BECh. 14 - Prob. 14.18BECh. 14 - Bonds Issued between Interest Payment Dates. For...Ch. 14 - Prob. 14.20BECh. 14 - Prob. 14.21BECh. 14 - Prob. 14.22BECh. 14 - Prob. 14.23BECh. 14 - Prob. 14.24BECh. 14 - Prob. 14.25BECh. 14 - Prob. 14.26BECh. 14 - Prob. 14.27BECh. 14 - Prob. 14.28BECh. 14 - Prob. 14.29BECh. 14 - Prob. 14.30BECh. 14 - Short-Term Debt Expected to Be Refinanced, IFRS....Ch. 14 - Prob. 14.32BECh. 14 - Prob. 14.33BECh. 14 - Prob. 14.34BECh. 14 - Prob. 14.35BECh. 14 - Fair Value Option. Saratoga Company issued bonds...Ch. 14 - Prob. 14.37BECh. 14 - Financial Statement Disclosure. Use the following...Ch. 14 - Prob. 14.1ECh. 14 - Prob. 14.2ECh. 14 - Prob. 14.3ECh. 14 - Prob. 14.4ECh. 14 - Prob. 14.5ECh. 14 - Bond Issue, Interest Payments, Effective Interest...Ch. 14 - Prob. 14.7ECh. 14 - Prob. 14.8ECh. 14 - Prob. 14.9ECh. 14 - Prob. 14.10ECh. 14 - Prob. 14.11ECh. 14 - Prob. 14.12ECh. 14 - Convertible Bonds, Conversion. On January 1, 2018,...Ch. 14 - Convertible Bonds, Conversion. Using the...Ch. 14 - Prob. 14.15ECh. 14 - Prob. 14.16ECh. 14 - Prob. 14.17ECh. 14 - Prob. 14.18ECh. 14 - Warrants. DHC Associates issued 2,100 of its...Ch. 14 - Prob. 14.20ECh. 14 - Prob. 14.21ECh. 14 - Prob. 14.1PCh. 14 - Long-Term Notes Payable, Semiannual Interest,...Ch. 14 - Note Payable Issued at a Discount with...Ch. 14 - Prob. 14.4PCh. 14 - Prob. 14.5PCh. 14 - Bond Issue, Interest Payments, Effective Interest...Ch. 14 - Prob. 14.7PCh. 14 - Bonds Sold between Interest Dates at a Discount,...Ch. 14 - Prob. 14.9PCh. 14 - Prob. 14.10PCh. 14 - Convertible Bonds, Bond Issue Costs, Conversion....Ch. 14 - Prob. 14.12PCh. 14 - Prob. 14.13PCh. 14 - Prob. 1JCCh. 14 - Prob. 2JCCh. 14 - Prob. 3JCCh. 14 - Prob. 1FSCCh. 14 - Prob. 1SSCCh. 14 - Surfing the Standards Case 2: Bonds with...Ch. 14 - Prob. 1BCC
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- Required Compute the cash proceeds from bond issues under the following terms. For each case, indicate whether the bonds sold at a premium or discount. (Round your answers to nearest dollar amount.) Cash Discount or Proceeds Premium а. Pear, Inc. issued $168,000 of 10-year, 8 percent bonds at 102. b. Apple, Inc. issued $139,000 of five-year, 12 percent bonds at 97. С. Cherry Co. issued $159,000 of five-year, 6 percent bonds at 102 1/4. d. Grape, Inc. issued $70,000 of four-year, 8 percent bonds at 98.00.arrow_forwardOn January 2,22 , Hoosier Company purchased $930,000 of 10% bonds at face value. The bond market value was $980,000 on December 31, 20Required: Prepare the appropriate journal entry on December 31, 2021, to properly value the bonds assuming the bonds are classified as:1. Trading securities.2. Securities available for sale.3. Held-to-maturity securities.arrow_forward1.What is the carrying amount of the bonds payable on Dec. 31, 2021? 2.On December 31, 2021, what amount should be recorded as discount or premium on bonds payable? 3.What is the share premium if all the warrants are exercised?arrow_forward
- provide answer with full explanation ( only type )arrow_forwardEWO Enterprises issues $4,500,000 of bonds payable.Required:Prepare the necessary journal entries to record the issuance of the bonds assuming the bonds were issued (a) at par, (b) at 104.5, and (c) at 99.arrow_forwardOn May 1, 2025, Blossom Company issued 2.500 $1.000 bonds at 102. Each bond was issued with one detachable stock warrant Shortly after issuance, the bonds were selling at 99, but the fair value of the warrants cannot be determined. a. Prepare the entry to record the issuance of the bonds and warrants. (List debit entry before credit entry. 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 O for the amounts)arrow_forward
- Koby Company issued $300,000 of bonds for $325,000. a. Determine the financial statement effect of the issuance of the bonds. TIP: if a category is not affected by the bond issuance, enter 0 or leave the field blank. If the transaction affects two accounts in the same category, enter the largest amount in the first row. Transaction Bond Issuance Assets 325,000 ✓= 050 Current assets Long-term liabilities Bonds payable Balance Sheet CHINI Stockholders' Liabilities + Equity 300,000 300,000 x x * 325,000 x x 300,000 x $ 0✔ 0✔ Revenue b. Illustrate how the bonds will be shown on the Koby Company's balance sheet at the issuance date. 25,000 x Income Statement 0 ✓- 0✔ Expenses Net Income 0✔ 0✔arrow_forwardSunland Corporation issued 1,800 $1,000 bonds at 101. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling separately at 98. The market price of the warrants without the bonds cannot be determined. Use the incremental method to record the issuance of the bords and warrants. (List all debit entries before credit entries. 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 O for the amounts.) Account Titles and Explanation Debit Creditarrow_forwardBlue 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 amountarrow_forward
- Your answer is partially correct. Eisler Corporation issued 2,000 $1,000 bonds at 101. 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 $40. 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 O for the amounts. Round your answers to O decimal places, e.g. 5,125.) Account Titles and Explanation Cash Discount on Bonds Payable Bonds Payable Paid-in Capital-Stock Warrants Debit 2020000 Credit 2000000 78780arrow_forwardA company issued 432 $1,000 bonds at 116, and each bond was issued with one detachable stock warrant. Shortly after issuance, the bonds were selling at 104, but the fair value of the warrants cannot be determined. In the entry to record the issuance of the bonds and warrants, how much should we record for Paid-in Capital – Stock Warrants?arrow_forwardAnne Corp. issued $600,000, 5% bonds.Required:Prepare the necessary journal entries to record the issuance of these bonds assuming the bondswere issued (a) at par, (b) at 102, and (c) at 92.arrow_forward
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