Problem 16-1 The stockholders' equity section of Cullumber Inc. at the beginning of the current year appears below. Common stock, $10 par value, authorized 1,097,000 shares, 281,000 shares issued and outstanding Paid-in capital in excess of par-common stock Retained earnings $2,810,000 554,000 556,000 During the current year, the following transactions occurred. 1. The company issued to the stockholders 92,000 rights. Ten rights are needed to buy one share of stock at $30. The rights were void after 30 days. The market price of the stock at this time was $32 per share. 2. The company sold to the public a $217,000, 10% bond issue at 103. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common stock at $28 per share. Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $7. 3. All but 4,600 of the rights issued in (1) were exercised in 30 days. 4. At the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good standing. 5. During the current year, the company granted stock options for 9,800 shares of common stock to company executives. The company, using a fair value option-pricing model, determines that each option is worth $10. The option price is $28. The options were to expire at year-end and were considered compensation for the current year. 6. All but 980 shares related to the stock-option plan were exercised by year-end. The expiration resulted because one of the executives failed to fulfill an obligation related to the employment contract. Your answer is partially correct. Try again. Prepare general journal entries for the current year to record the transactions listed above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Round intermediate calculations to 5 decimal places, e.g. 1.24687 and final answers to o decimal places, e.g. 5,125.) No. Account Titles and Explanation Debit Credit 1. No Entry No Entry 2. Cash 217000 TRGOTT Discount on Bonds Payable 8427 Bonds Payable 210680 Liability under Stock Appreciation Plan 14748 3. Tcash 13800 I Common Stock 4600 Paid-in Capital in Excess of Par - Common Stock 9200 4. Tcash 47192 Paid-in Capital-Stock Warrants | Common Stock 21068 Paid-in Capital-Stock Warrants 37922 5. Compensation Expense T INTO THLOQOTCO MM DROT HITROTTGOTI 98000 T Paid-in Capital-Expired Stock Options 98000 6. For options exercised: Cash 27440 Common Stock 9800 Paid-in Capital in Excess of Par - Common Stock 17640 For options lapsed: No Entry No Entry List of Accounts Problem 16-1 Bond Conversion Expense Bonds Payable Cash Compensation Expense Common Stock Convertible Preferred Stock Debt Conversion Expense Discount on Bonds Payable Income Summary Incremental Cash Insurance Expense Interest Expense Interest Payable Interest Receivable Liability under Stock Appreciation Plan No Entry Paid-in Capital in Excess of Par - Common Stock Paid-in Capital in Excess of Par - Preferred Stock Paid-in Capital-Expired Stock Options Paid-in Capital-Stock Options Paid-in Capital-Stock Warrants Premium on Bonds Payable Preferred Stock Retained Earnings Unamortized Bond Issue Costs Unearned Compensation Problem 16-1 The stockholders' equity section of Cullumber Inc. at the beginning of the current year appears below. Common stock, $10 par value, authorized 1,097,000 shares, 281,000 shares issued and outstanding Paid-in capital in excess of par-common stock Retained earnings $2,810,000 554,000 556,000 During the current year, the following transactions occurred. 1. The company issued to the stockholders 92,000 rights. Ten rights are needed to buy one share of stock at $30. The rights were void after 30 days. The market price of the stock at this time was $32 per share. 2. The company sold to the public a $217,000, 10% bond issue at 103. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common stock at $28 per share. Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $7. 3. All but 4,600 of the rights issued in (1) were exercised in 30 days. 4. At the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good standing. 5. During the current year, the company granted stock options for 9,800 shares of common stock to company executives. The company, using a fair value option-pricing model, determines that each option is worth $10. The option price is $28. The options were to expire at year-end and were considered compensation for the current year. 6. All but 980 shares related to the stock-option plan were exercised by year-end. The expiration resulted because one of the executives failed to fulfill an obligation related to the employment contract. Your answer is partially correct. Try again. Prepare general journal entries for the current year to record the transactions listed above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Round intermediate calculations to 5 decimal places, e.g. 1.24687 and final answers to o decimal places, e.g. 5,125.) No. Account Titles and Explanation Debit Credit 1. No Entry No Entry 2. Cash 217000 TRGOTT Discount on Bonds Payable 8427 Bonds Payable 210680 Liability under Stock Appreciation Plan 14748 3. Tcash 13800 I Common Stock 4600 Paid-in Capital in Excess of Par - Common Stock 9200 4. Tcash 47192 Paid-in Capital-Stock Warrants | Common Stock 21068 Paid-in Capital-Stock Warrants 37922 5. Compensation Expense T INTO THLOQOTCO MM DROT HITROTTGOTI 98000 T Paid-in Capital-Expired Stock Options 98000 6. For options exercised: Cash 27440 Common Stock 9800 Paid-in Capital in Excess of Par - Common Stock 17640 For options lapsed: No Entry No Entry List of Accounts Problem 16-1 Bond Conversion Expense Bonds Payable Cash Compensation Expense Common Stock Convertible Preferred Stock Debt Conversion Expense Discount on Bonds Payable Income Summary Incremental Cash Insurance Expense Interest Expense Interest Payable Interest Receivable Liability under Stock Appreciation Plan No Entry Paid-in Capital in Excess of Par - Common Stock Paid-in Capital in Excess of Par - Preferred Stock Paid-in Capital-Expired Stock Options Paid-in Capital-Stock Options Paid-in Capital-Stock Warrants Premium on Bonds Payable Preferred Stock Retained Earnings Unamortized Bond Issue Costs Unearned Compensation