SOLARK Ltd. Issues $2,500,000 par value, 8% bonds. To help the sale, detachable stock warrants are issued at the rate of ten warrants for each $1,000 bond sold. It is estimated that the value of the bonds without the warrants is $2,465,000 and the value of the warrants is $126,000. The bonds with the warrants sold at 101. Use the residual method.

Required: Prepare the journal entry to record the issuance of bond