1. Anteater Company issued 100 bonds, each with a face amount of $1,000, with detachable stock warrants at 101. Each warrant entitled its holder to acquire one share of $100 par common stock for $120 per share. Through discussion with investment bankers, it is determined that the bonds would sell for 97 without the warrants. The market value of each warrant is $50.

Instructions:

a. Record the issuance of the bonds.

b. Record the subsequent exercise of all of the warrants.

c. Record the entry necessary if all of the warrants expire before being exercised.

d. If the warrants were nondetachable, record the journal entry for the issuance of the bonds.