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Sweet Corporation issued 3,500, five year, 3% bonds at 104 on January 1, 2020. Interest is paid annually. Each $1,000 bond carried one detachable warrant
Sweet Corporation issued 3,500, 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 Sweet at $10 per share, the price at which Sweet shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 5%. On June 30, 2020, 700 of the bond holders exercised the options to buy the shares. Prepare the journal entries to record these events.
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