At the start of the year, Triple T Company issued $6 million of 7 notes along with warrants to buy 400,000 shares of its $10 par value common stock at $18 per share The notes mature over the next 10 years, starting one year from date of issuance, with annual maturities of $600,000 At the time, Trip...

A warrant is a derivative that gives the right or entiltelment but not th ...

At the start of the year, Triple T Company issued $6 million of 7% notes along with

Question:

At the start of the year, Triple T Company issued $6 million of 7% notes along with warrants to buy 400,000 shares of its $10 at $18 per share. The notes mature over the next 10 years, starting one year from date of issuance, with annual maturities of $600,000. At the time, Triple T had 3,200,000 shares of outstanding, and the market price was $23 per share. The company received $6,680,000 for the notes and the warrants. For Triple T, 7% was a relatively low borrowing rate. If offered alone, at this time, the notes would have been issued at a 20 to 24% discount.
Prepare journal entries for the issuance of the notes and warrants for the cash consideration received. Notes would have been issued at a 20% to 24% discount.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...