PROBLEM 22-7 MARIANNE COMPANY Required: Prepare journal entries to record the independent transactions. Marianne Company provided the following independent transactions affecting shareholders' equity: 1. Issued 25,000 rights to shareholders, 1 right on each share, permitting holders to acquire one ordinary share of P50 par value at P60 with every 5 rights submitted. Shares are selling at P30 per share at this time. Subsequently, 20,000 rights are exercised and 5,000 rights expired. Cash (4,000 x 60) 240,000 Ordinary share capital 200,000 (20,000 rights / 5 = 4,000 shares) Share premium 40,000 2. Issued 20,000 preference shares of P 100 par value for P2,500,000, with 20,000 warrants to acquire 10,000 ordinary shares, P50 par, at P60. On the date of the issuance, the warrants have a market value of P10, but the preference share has no known market value ex-value. Subsequently, 18,000 warrants were exercised and the remainder lapsed. Sales price 2,500,000 Less: Market value of warrants (20,000 x 10) 200,000