5. In 2015, The Platinum Company issued $700,000 8% bonds with 700 nondetachable warrants for $765,000 cash.
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5. In 2015, The Platinum Company issued $700,000 8% bonds with 700 nondetachable warrants for $765,000 cash. Each warrant entitled the holder to buy 100 shares of The Platinum Companys $2 par common stock at $20 per share and required surrender of the attached $1,000 bond. On March 2, 2021, all The Platinum Company bondholders exercised their warrants for new shares and forfeited the bonds when shares were trading at $40 per share. On March 2, 2021, the unamortized premium on the bonds was $25,000.
a. (8%) Prepare the necessary journal entry for the bond conversion on March 2, 2021 Assume that The Platinum Company uses the market method to record the stock issuances.
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