Exercise 15-4 Faith Evans Corporation is a regional company which is an SEC registrant. The corporations securities are thinly traded on NASDAQ. Faith Evans Corp. has issued 10,600 units. Each unit consists of a $530 par, 12% subordinated debenture and 11 shares of $5 par common stock. The investment banker has retained 424 units as the underwriting fee. The other 10,176 units were sold to outside investors for cash at $933 per unit. Prior to this sale, the 2-week ask price of common stock was $42 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Evans transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quote on the common stock reflects fair value.

I have included the account titles

No. Account Titles and Explanation Debit Credit

1. Unamortized Bond Issue Costs

Cash

Bonds Payable

Common Stock

Paid-in Capital in Excess of Par - Common Stock

2. Cash Unamortized Bond Issue Costs

Discount on Bonds Payable

Bonds Payable

Common Stock

Paid-in Capital in Excess of Par - Common Stock