Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On March 15, 2020, Clunky Industries Inc. Issued $500 million of 5 year 4.75% Junior unsecured bonds with detachable warrants at parFor every 51000 of

image text in transcribed
image text in transcribed
On March 15, 2020, Clunky Industries Inc. Issued $500 million of 5 year 4.75% Junior unsecured bonds with detachable warrants at parFor every 51000 of bond purchased an Investor received 50 warrants. Each warrant entitled its owner to purchase one share of common stock for $10 per share par vale 50.10 per share on or before March 15 2025. Based on the value of the company's stock the fair value of the warrants was $86 million. The journal entry to record the issue of the bonds and warrant comprised which four of the following items? Dr. Cash $500 million Cr. Debt payable $500 million Dr. Cash 586 million Dr. Cash $414 million Cr. Additional paid-in capital -- warrants 586 million Dr. Discount on debt payable 5114 million Discount on debt payable $86 million Cr. Debt payable $414 million Cr. Common stock at par $250 On March 15, 2020. Clunky Industries Inc issued 5500 million of 5 year 4.75% junior unsecured bonds with detachable warrants at par. For every $1000 of bonds purchased an investor received 50 warrants. Each warrant entitled its owner to purchase one share of common stock for $10 per share (par value 50.10 per share on or before March 15, 2025. Based on the value of the company's stock, the fair value of the warrants was $86 million. The journal entry to record the issue of the bonds and warrants comprised which four of the following items! Dr. Cash $500 million Cr. Debt payable $500 million Dr. Cash 586 million Di Cash $414 million Cr. Additional paid in capital warrants $86 million Dr Discount on debt payable $114 million Discount on debt payable 586 million Ci Debt payable $414 million C. Common stock at par 5250 DEBE Next

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

Audit Report Chavarria Dinne And Lamey LLC Contract Deliverables Office Of Inspector U.S Department Of The Interior

Authors: United States Department Of The Interior

1st Edition

1511678526, 978-1511678520

More Books

Students also viewed these Accounting questions

Question

Make efficient use of your practice time?

Answered: 1 week ago