Question
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
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 18,000 units. Each unit consists of a $900 par, 12% subordinated debenture and 18 shares of $9 par common stock. The units were sold to outside investors for cash at $1584 per unit. Prior to this sale, the 2-week ask price of common stock was $72 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bond is equal to the fair value
(a) prepare the journal entry to record evans transaction,
- Employing the incremental method
- Employing the proportional method
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