Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need help on 4th bantuan boowolasM 15 muzz won 4. On January 1, 2019, Legion Memorial Corporation issued $20 million of tato nonconvertible bonds at

need help on 4th image text in transcribed
bantuan boowolasM 15 muzz won 4. On January 1, 2019, Legion Memorial Corporation issued $20 million of tato nonconvertible bonds at 105. The bonds have a 4% coupon rate and mature in 10 years. Each $1,000 bond was issued with 15 detachable stock warrants, each of which entitled the holder to purchase one share of Legion's no-par common stock for $25. Immediately after issuance, the separate market value of the warrants was $5. a. Prepare the journal entry for Legion to record the issuance of these bonds. cash (185% of 20M) 21,000,000 Discount on BIP bonds pays 500,000 nisbiano ebrio Bonds payable 20,000,000 (became Equity - Stock warrants rit 1 tsw.de 1,500,000 b. Calculate the effective interest rate for the bond component (only) of 5022l debat this financial instrument. (Again, you know PV, Pmt, FV and N; you can solve for I). You can round this interest rate to 2 decimal places. N= 20 I= ? I= 2.19% semi-annualy NE - 21,000,000 4.38% annualy PMT= 500,000 FV - 20,000,000 c. Using the effective rate from b., prepare an amortization table that covers the first four coupon payments on this bond. Wate Int Payment Int . exp. Amortization carrying value 1.1.2019 21,000,000 459,990 40100 500,000 6.30.19 20,959,900 459,022 40978 20,918,922 12.31.19 458, 124 20,8T), 046 6.30.20 437,207 42793 20,834,253 41876 500,000 500,000 500,000 12.31.20 d. On January 1, 2021, assume that holders of 50,000 of the stock warrants elect to exercise these options and buy Legion common stock. Prepare the journal entry for this transaction. Common stock 50,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Quality Auditing In Construction Projects

Authors: Abdul Razzak Rumane

1st Edition

1032570245, 978-1032570242

More Books

Students also viewed these Accounting questions

Question

Describe three changes that occur in chromosome structure.

Answered: 1 week ago

Question

Discuss the challenges facing purchasing.

Answered: 1 week ago

Question

Describe how to train managers to coach employees. page 404

Answered: 1 week ago

Question

Discuss the steps in the development planning process. page 381

Answered: 1 week ago