b own ads intemnediate %20Accounting%201 6th%20Edition%20by%20Kieso %20weygandt,%20warfield%20copy p nga P16-1 (L01,2,3) GROUPWORK (Entries for Various Dilutive Securities) The stockholders' equity section of Martino Inc. below Common stock, $10 par value, authorized 1,000,000 shares, 300,000 shares issued and outstanding Paid-in capital in excess of par- common stock Retained earnings $3,000,000 During the current year, the following transactions occurred 1. The company issued to the stockholders 100,000 rights. Ten rights are needed to buy one share of stock at $32. The rights 2. The company sold to the public a S2000000, 10% bond issue at 104. The company also issued with each S100 bond one 3. All but 5,000 of the rights issued in (1) were exercised in 30 days. were void after 30 days. The market price of the stock at this time was $34 per share. detachable stock purchase warrant, which provided for the purchase of common stock at $30 per share. Shortly after issu- ance, similar bonds without warrants were selling at 96 and the warrants at $8. At the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good standing 5. During the current year, the company granted stock options for 10,000 shares of common stock to company executives The company, using a fair value option-pricing model, determines that each option is worth $10. The option price is $30. The options were to expire at year-end and were considered compensation for the current year 882 Chapter 16 Dilutive Securities and Earnings per Share 6. All but 1,000shares related to the stock-option plan were exercised by year-end. The expiration resul executives failed to fulfill an obligation related to the employment contract. Instructions (a) Prepare general journal entries for the current year to record the transactions listed above. (b) Prepare the stockholders' equity section of the balance sheet at the end of the current year. Assume that retained earn- ings at the end of the current year is $750,000