Recording the Issuance of Bonds with Detachable Warrants

Recording the Issuance of Bonds with Detachable Warrants On December 1, Junction Company issued 6,400 of its 9%, 10-year, $1 ,000 par value, nonconvertible bonds with detachable stock purchase warrants at 104. Each bond carried two detachable warrants; each warrant was for one share of common stock at an option price of $15 per share. Shortly after issuance, the warrants were quoted on the market for $3 each. Fair value for the bonds without the warrants cannot be determined. Interest is payable on December 1 and June 1. Provide the entry to record issuance of the bonds by Junction Company on December 1. Date Dec. I Cash Bonds Payable Account Name 6,400 0 0 0 Cr. o o o 6,400 x x x x To record the issuance of bonds.