33 34 Problem #4 35 36 Bonds with Warrants 37 38 39 Bobby Wino, majority owner of Weinstein's Nordic Italian Cuisine (WNIC) needed a modest Lajolla beachfront home and elected to raise capital by issuing $4,000,000 face value bonds with a coupon rate of 4%. 40 41 42 a 43 44 To make the securities more attractive WNIC offered the bonds with stock warrants at a rate of one warrant for each $1,000 bond. The value of the bonds without the warrants is considered to be $3,942,785, and the value of the warrants in the market is $80,465. The bonds/warrants sold in the market at issuance for $4,002,075 45 46 47 48 a b 49 50 51 52 53 54 Required: Prepare the appropriate journal entry to record the issuance of the bonds and the warrants assuming the warrants are detachable b Prepare the appropriate journal entry to record the issuance of the bonds and the warrants assuming the warrants are not detachable and the individual fair market values are not determinable. 55 56 57 58