Question
Pronghorn Corporation issued 5,400, five year, 3% bonds at 104 on January 1, 2020. Interest is paid annually. Each $1,000 bond carried one detachable warrant
Pronghorn Corporation issued 5,400, five year, 3% bonds at 104 on January 1, 2020. Interest is paid annually. Each $1,000 bond carried one detachable warrant allowing the holder to purchase 100 common shares in Pronghorn at $10 per share, the price at which Pronghorn shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 6%. On June 30, 2020, 1,080 of the bond holders exercised the options to buy the shares. Prepare the journal entries to record these events. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date | Account Titles and Explanation | Debit | Credit |
Jan. 1, 2020 | Cash | 5616,000 | |
Bonds payable | ? | ||
Contributed surplus - stock warrants | ? | ||
Jun. 30, 2020 | Cash | 1,080,000 | |
Contributed surplus - stock warrants | ? | ||
common shares | ? |
The journal entries and the cash amounts provided are correct just answer the one with question marks please and thank you!
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