Question
On April 7, 2018, Vaughn Manufacturing sold a $6050000, twenty-year, 9 percent bond issue for $6413000. Each $1000 bond has two detachable warrants, each of
On April 7, 2018, Vaughn Manufacturing sold a $6050000, twenty-year, 9 percent bond issue for $6413000. Each $1000 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: 9% bond without warrants $1007 Warrants 22 Common stock 28 What accounts should Vaughn credit to record the sale of the bonds? (rounded to the nearest dollar)
Bonds Payable $6050000 Premium on Bonds Payable 363000
Bonds Payable $6050000 Premium on Bonds Payable 228760
Paid-in CapitalStock Warrants 134240 Bonds Payable $6050000
Premium on Bonds Payable 55539 Paid-in CapitalStock Warrants 253011
Bonds Payable $6050000 Premium on Bonds Payable 94520 Paid-in CapitalStock Warrants 268480
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