The stockholders' equity section of Larkspur Inc. at the beginning ot the currenl yei ppeJ Common stock, $10 par value, authorized 1,066,000 shares, 306,000 shares issued and outstanding $3,060,000 552,000 626,000 Paid-in capital in excess of par-common stock Retained earnings During the current year, the following transactions occurred. 1. The company issued to the stockholders 97,000 rights. Ten rights are needed to buy one share of stock at $31. The rights were void after 30 days. The market price of the stock at this time was $33 per share 2. The company sold to the public a $201,000, 10% bond issue at 104. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common stock at $29 per share. Shorty issuance, similar bonds without warrants were selling at 96 and the warrants at $8. 3. All but 4,850 of the rights issued in (1) were exercised in 30 days 4. A t the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good standing. 5. Durin g the current year, the company granted stock options for 9,500 shares of common stock to company executives. The company, using a fair value option-pricing model, determines that options were to expire at year-end and were considered compensation for the current year. each option is worth $10. The option price is $29. The 6. All but 950 shares related to the stock-option plan were exercised by year-end. The expiration resulted because one of the executives failed to fulfill an obligation related to the employment contract. Prepare general journal entries for the current year to record the transactions listed above. (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 O for the amounts. Round intermediate calculations to 5 decimal places, e.g. 1.24687 and final answers to O decimal places, e.g. 5,125) Debit Credit No. Account Titles and Explanation 1. |No Entry No Entry 209,040 2. Cash 8,040 Discount on Bonds Payable 201,000 Bonds Payable 16,080 Paid-in Capital-Stock Warrants 304,095 3. Cash 92,150 Common Stock 211,945 Paid-in Capital in Excess of Par - Common Stock 4. Cash 49,848 49,848 4[cash 12,864 Paid-in Capital-Stock Warrants 16,080 Common Stock 46,632 Paid-in Capital in Excess of Par Common Stock 5. |Compensation Expense 95,000 Paid-in Capital-Stock Options 95,000 it ) [i- Cash 247.9501 Paid-in Capital-Stock Options 85,500 Common Stock 85,500 Paid-in Capital in Excess of Par - Common Stock 247,950 For options lapsed: retained earnings at Prepare the stockholders' equity section of the balance sheet at the end of the current year. Assume that the end of the current year is $774,000. Larkspur Inc. Balance Sheet SHOW LIST OF ACCOUNTS SHOW SOLUTION