Question
On September 1, 2017, Novak Company sold at 104 (plus accrued interest) 3,720 of its 8%, 10-year, $1,000 face value, nonconvertible bonds with detachable stock
On September 1, 2017, Novak Company sold at 104 (plus accrued interest) 3,720 of its 8%, 10-year, $1,000 face value, nonconvertible bonds with detachable stock warrants. Each bond carried two detachable warrants. Each warrant was for one share of common stock at a specified option price of $17 per share. Shortly after issuance, the warrants were quoted on the market for $3 each. No fair value can be determined for the Novak Company bonds. Interest is payable on December 1 and June 1. Bond issue costs of $21,800 were incurred. Prepare in general journal format the entry to record the issuance of the bonds.
Here are my answers based off of a similar practice problem. I can't figure out what I'm doing wrong.
Account Titles and Explanation Debit Credit Unamortized Bond Issue Costs 21800 Cash Bonds Payable 3794400 Premium on Bonds Payable 126480 Paid-in Capital-Stock Warrants 22320Step by Step Solution
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