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Question 1. On May 1, Friendly Company issued 2,000 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Immediately after issuance,
Question 1. On May 1, Friendly Company issued 2,000 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Immediately after issuance, bonds had a fair value of $1,960,000, and warrants had a fair value of $80,000. Make the journal entries on May 1 for the investor who purchased the bonds and detachable stock warrants. Assume Friendly Companys 2,000 $1,000 bonds mature in 10 years. When the bonds mature, what are the journal entries for the issuer and the investor, respectively?
Question 1. On May 1, Friendly Company issued 2,000 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Immediately after issuance, bonds had a fair value of $1,960,000, and warrants had a fair value of $80,000.
Make the journal entries on May 1 for the investor who purchased the bonds and detachable stock warrants.
Assume Friendly Companys 2,000 $1,000 bonds mature in 10 years. When the bonds mature, what are the journal entries for the issuer and the investor, respectively?
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