$($Entries for Various Dilutive Securities$)$ The stockholders$$ equity section of Martino Inc. at the beginning of the current year appears 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

During the current year, the following transactions occurred.

$$3,000,000600,000570,000$

$1.$ Thecompanyissuedtothestockholders$100,000$rights.Tenrightsareneededtobuyoneshareofstock at $$32.$ The rights were void after $30$ days. The market price of the stock at this time was $$34$ per share.

$2.$ The company sold to the public a $$200,000,10\%$ bond issue at $104.$ The company also issued with each $$100$ bond one detachable stock purchase warrant, which provided for the purchase of com$-$ mon stock at $$30$ per share. Shortly after issuance, similar bonds without warrants were selling at $96$ and the warrants at $$8.$

$3.$ All but $5,000$ of the rights issued in $(1)$ were exercised in $30$ days.

$4.$ At the end of the year, $80\%$ of the warrants in $(2)$ had been exercised, and the remaining were out$-$

standing 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 consid$-$ ered compensation for the current year.

$6.$ Allbut$1,000$sharesrelatedtothestock$-$optionplanwereexercisedbyyear$-$end.Theexpirationresulted because one of the 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 earnings at the end of the current year is $$750,000.$