Homework help,

3A.

Burlington Company granted 10 officers on May 1, 2020, the rights to buy 1,000 shares each
of $2 par common stock at $10 per share which was the market value on the grant
date. The rights cannot be exercised until 2021 and expire at the end of the year (2021).
Compensation expense is $40,000 and is for the year 2021.
Record the following								Dr.	Cr.
May 1, 2020 the issue of the rights on the grant date
Compensation expense for December 31, 2021
On July 1, 2021, 80% of the rights were exercised because the market price was $13
On December 31, 2021 10% of thew rights were not exercised as one officer left
to join another company. The remaining 10% were simply not exercised and
allowed to expire.

3B.

	Manchester Company issued 1,000 bonds each with a par value of $1,000 and each carry a
	detachable warrant for the purchase of 4 shares at $40 each. On the date of the bond
	issue, the bonds could have been at par, and the warrants could have been sold
	for $80 each separately. The bond was issued for $1,025,000 on Janaury 5, 2020.
a. Prepare a schedule allocating the bond issue receipsts to the bond and the warrants.
	Use the proportional method.
b. Record the issue of the two securities using the proportional method									Dr.	Cr.