On August 1, 2018, Limbaugh Communications issued $25 million of 8% nonconvertible bonds at 102. The bonds are due on July 31, 2038. Each $1,000 bond was issued with 20 detachable stock warrants, each of which entitled the bondholder to purchase, for $50, one share of Limbaugh Communications' no par common stock. Interstate Containers purchased 20% of the bond issue. On August 1, 2018, the market value of the common stock was $48 per share and the market value of each warrant was $8. In February 2029, when Limbaugh's common stock had a market price of $62 per share and the unamortized discount balance was $2 million, Interstate Containers exercised the warrants it held. Required 1. Prepare the journal entries on August 1, 2018, to record (a) the issuance of the bonds by Limbaugh and (b) the investment by Interstate. 2. Prepare the journal entries for both Limbaugh and Interstate in February 2029, to record the exercise of the warrants. Journal entry worksheet 2 Record the issuance of the bonds by Limbaugh Note: Enter debits before credits. Event General Journal Debit Credit Cash Discount on bonds payable Bonds payable Equity-stock warrants Journal entry worksheet Record the investment by Interstate. Note: Enter debits before credits. Event General Journal Debit Credit 2nvestment in stock warrants Investment in bonds Discount on bond investment Cash Journal entry worksheet 2 Record the exercise of the warrants for Limbaugh Note: Enter debits before credits. Event General Journal Debit Credit Cash quity-stock warrants Common stock Record entry Clear entry View general journal Journal entry worksheet Record the exercise of the warrants for Interstate Note: Enter debits before credits. Event General Journal Debit Credit Investment in common stock Investment in stock warrants Cash 2 Record entry Clear entry View general journal