Here are 7 accounting questions. I have put the answers to the problems. I just need to know how to arrive at the solutions. Thanks! Denise 54. On April 7, 2010, Kegin Corporation sold a $2,000,000, twenty-year, 8 percent bond issue for $2,120,000. Each $1,000 bond has two detachable warrants, each of which permits the purchase of one share of the corporation's common stock for $30. The stock has a par value of $25 per share. Immediately after the sale of the bonds, the corporation's securities had the following market values: 8% bond without warrants $1,008 Warrants 21 Common stock 28 What accounts should Kegin credit to record the sale of the bonds? a. Bonds Payable $2,000,000 Premium on Bonds Payable 77,600 Paid-in CapitalStock Warrants 42,400 b. Bonds Payable $2,000,000 Premium on Bonds Payable 16,000 Paid-in CapitalStock Warrants 84,000 c. Bonds Payable $2,000,000 Premium on Bonds Payable 35,200 Paid-in CapitalStock Warrants 84,800 d. Bonds Payable $2,000,000 Premiums on Bonds Payable 120,000 Answer is C Use the following information for questions 55 and 56. On May 1, 2010, Payne Co. issued $300,000 of 7% bonds at 103, which are due on April 30, 2020. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Paynes common stock, $15 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2010, the fair value of Paynes common stock was $35 per share and of the warrants was $2. 55. On May 1, 2010, Payne should credit Paid-in Capital from Stock Warrants for a. $11,520. b. $12,000. c. $12,360. d. $21,000. Answer is C 56. On May 1, 2010, Payne should record the bonds with a a. discount of $12,000. b. discount of $3,360. c. discount of $3,000. d. premium of $9,000. Answer is B On May 1, 2010, Marly Co. issued $500,000 of 7% bonds at 103, which are due on April 30, 2020. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Marlys common stock, $15 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2010, the fair value of Marlys common stock was $35 per share and of the warrants was $2. 59. On May 1, 2010, Marly should record the bonds with a a. discount of $20,000. b. discount of $5,000. c. discount of $5,600. d. premium of $15,000. C 60. On May 1, 2010, Marly should credit Paid-in Capital from Stock Warrants for a. $35,000 b. $20,600 c. $20,000 d. $19,200 Answer is B On January 1, 2010, Korsak, Inc. established a stock appreciation rights plan for its executives. It entitled them to receive cash at any time during the next four years for the difference between the market price of its common stock and a pre-established price of $20 on 60,000 SARs. Current market prices of the stock are as follows: January 1, 2010 $35 per share December 31, 2010 38 per share December 31, 2011 30 per share December 31, 2012 33 per share Compensation expense relating to the plan is to be recorded over a four-year period beginning January 1, 2010. *76. What amount of compensation expense should Korsak recognize for the year ended December 31, 2011? a. $0 b. $30,000 c. $300,000 d. $150,000 B *77. On December 31, 2012, 16,000 SARs are exercised by executives. What amount of compensation expense should Korsak recognize for the year ended December 31, 2012? a. $285,000 b. $195,000 c. $585,000 d. $78,000 A