On January 1, 2017, United Corporation issued $10 million of 8% bonds at 105 (coupon payments are to be made annually at the end of the year). The bonds mature in 10 years. Each $1,000 bond was issued with 20 detachable stock warrants, each of which entitled the bondholder to purchase, for $50, one share of United common stock. On January 1, 2017, the market value per share for United stock was $48.00 and the market value of each warrant was $5.50.

Scenario 1

Prepare the journal entry on January 1, 2017 to record the issuance of the bonds and stock warrants by United.