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Part 6-10 points Warrants? The Stacy Kent Company has decided to raise additional capital by issuing $100,000 face value bonds with a coupon rate
Part 6-10 points Warrants? The Stacy Kent Company has decided to raise additional capital by issuing $100,000 face value bonds with a coupon rate of 9%. To help the sale of the bonds, detachable stock warrants are issued at a rate of one warrant for each $1,000 bond sold. The value of the bonds without the warrants is considered to be $144,000 and the value of the warrants in the market is $16,000. The bonds sold in the market (with the detachable warrants) for $150,000. 1. What entry should be made at the time of the issuance of the bonds and the warrants? issuance: ance: Bonds Dit prod Wassance Aber 10,000 its 16,000 Credit so 16,000 Debit bords+onts/ ? N 2. Suppose instead, the value of the warrants was unknown and the value of the bonds was still considered to be $144,000. What entry should be made at the time of the issuance of the bonds and the warrants.
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