On July 1, 2019, Salem Corporation issued $3 million of 12% bonds payable in 10 years. The

Question:

On July 1, 2019, Salem Corporation issued $3 million of 12% bonds payable in 10 years. The bonds pay interest semiannually. The bonds include detachable warrants giving the bondholder the right to purchase for $30, one share of $1 par value common stock at any time during the next 10 years. Salem sold the bonds for $3 million. The value of the warrants at the time of issuance was $200,000.

Required:

Prepare in general journal format the entry to record the issuance of the bonds.

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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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,...

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