Prepare the journal entries for the following transactions involving stock warrants

a) The firm issues 5-year warrants that give the holder the right to purchase a share of common stock with a par value of $1 for $10.

b) The firm sells 500 bonds with detachable stock warrants for $600,000, their par or face value. The 5-year warrants give the holder the right to purchase a share of $1 par value common stock for $10. The firm has determined that the fair value of the warrants is $2,500 and the fair value of the bonds without warrants was $550,000.

c) All the warrants are exercised.

d) Provide a verbal description of how would the accounting b) would change if the fair market value of the bonds was determinable, but the fair market value of the warrants was not.