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On April 1, 2021, Town Corporation issued $400,000 (400 units of $1,000 bond) of 10% bonds at 105. Each $1,000 bond was sold with 25
On April 1, 2021, Town Corporation issued $400,000 (400 units of $1,000 bond) of 10% bonds at 105. Each $1,000 bond was sold with 25 detachable stock warrants, each permitting the investor to purchase one share of $5 par common stock for $18. On that date, the market value of each warrant was $4. Town Corp. should record which of the following entries on the date of issuance? Debit cash $400,000 Credit Premium on Bonds Payable of $20,000. O Debit Paid-in capital. Warrant $40,000 O Debit Discount on Bonds Payable of $20,000. On March 1, 2022, when Town Corporation's common stock had a market price of $20 per share, 40% of the warrants were exercised. Which of the following entries are correct for Town Corporation? O Debit cash of $80,000 O Debit cash of $72,000 O Credit Paid-in capital-Warrants of $16,000 O Credit Common Stock of $56,000
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