SandhillCorporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ.SandhillCorp. has issued16,000units. Each unit consists of a $800par, 12% subordinated debenture and16shares of $8par common stock. The units were sold to outside investors for cash at $1,408per unit. Prior to this sale, the 2-week ask price of common stock was $64per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value.

(a)Prepare the journal entry to recordSandhill'stransaction, under the following conditions.(Round answers to 0 decimal places, e.g. $38,487. 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 0 for the amounts.)

(1)Employing the incremental method.(2)Employing the proportional method, assuming the recent price quote on the common stock reflects fair value.

No.

Account Titles and Explanation

Debit

Credit

1.enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

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enter an account title

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enter an account title

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2.enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

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