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Please help! Fort Company issued 5,500 of its $1,000 par value bonds for $1,520, providing total cash proceeds of $8,360,000. The market price of Fort's
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Fort Company issued 5,500 of its $1,000 par value bonds for $1,520, providing total cash proceeds of $8,360,000. The market price of Fort's common shares on the date that it issued the bonds was $22 per share. It sold the bonds with 385,000 detachable warrants to acquire 385,000 shares of the company's $1 par value common stock for $22 per share. That is, each bond carries 70 warrants x 5,500 bonds = 385,000 shares. Fort had existing bonds outstanding that trade without warrants at $1,300. Prepare the journal entry to record the issuance of the bonds assuming that the incremental method is used and the market value of the warrants is not reasonably determinable. (Record debits first, then credits. Exclude explanations from any journal entries.) Account Date of Issue Cash Discount on Bonds Payable Bonds Payable Additional Paid-in CapitalStock WarrantsStep by Step Solution
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