Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

Please help!

image text in transcribed

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 Warrants

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

Forensic And Investigative Accounting

Authors: Professor D. Larry Crumbley, Lester E. Heitger, G. Stevenson Smith

8th Edition

0808046241, 9780808046240

More Books

Students also viewed these Accounting questions

Question

=+2. What do they like better about its competition?

Answered: 1 week ago

Question

=+a. What kind of personality does the brand have?

Answered: 1 week ago