Question

1. Anteater Company issued 100 bonds, each with a face amount of $1,000, with detachable stock...

1. Anteater Company issued 100 bonds, each with a face amount of $1,000, with detachable stock warrants at 101. Each warrant entitled its holder to acquire one share of $100 par common stock for $120 per share. Through discussion with investment bankers, it is determined that the bonds would sell for 97 without the warrants. The market value of each warrant is $50.

Instructions:

a. Record the issuance of the bonds.

b. Record the subsequent exercise of all of the warrants.

c. Record the entry necessary if all of the warrants expire before being exercised.

d. If the warrants were nondetachable, record the journal entry for the issuance of the bonds.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Anteater Company issued 100 bonds, each with a face amount of $1,000, with nondetachable stock warrants...
Anteater Company issued 100 bonds, each with a face amount of $1,000, with nondetachable stock warrants at 101. Each warrant entitled its holder to acquire one share of $100 par common stock for $120 per share. Through discussion with investment bankers, it is determined that the bonds would sell for 97 without the warrants. The market value of each warrant is $50. 1.Record the journal entry for the issuance of the bonds.
Mark Labs. Issued 100 bonds, $100 par, each with a detachable stock warrants. Each warrant maybe...
Mark Labs. Issued 100 bonds, $100 par, each with a detachable stock warrants. Each warrant maybe exercised to purchase 1 share of $100 par common stock. THE TOTAL SELLING PRICE IS THE PAR OF $10,000. At the time of the sale, the market value of the bonds (without the warrants) is 102, while the market value of each warrants is $30. REQUIRED: Allocate the $10,000 between the Bonds and the Warrants
1. Pharoah Corporation issued 1,500 $1,000 bonds at 101. Each bond was issued with one detachable...
1. Pharoah Corporation issued 1,500 $1,000 bonds at 101. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling separately at 97. The market price of the warrants without the bonds cannot be determined. Use the incremental method to record the issuance of the bonds and warrants. (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...
Headland Corporation issued 2,000 $1,000 bonds at 101. Each bond was issued with one detachable stock...
Headland Corporation issued 2,000 $1,000 bonds at 101. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling in the market at 98, and the warrants had a market price of $40. Use the proportional method to record the issuance of the bonds and warrants. (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...
1.   On August 1, 2022, United Corporation issued $6 million of 8% convertible bonds at 102....
1.   On August 1, 2022, United Corporation issued $6 million of 8% convertible bonds at 102. The bonds mature in 20 years. Each $1,000 bond was issued with 10 detachable stock warrants, each of which entitled the bondholder to purchase, for $30, one share of United no par common stock. On August 1, 2022, the market value per share for United stock was $33 and the market value of each warrant was $3. In March 2028, when United common stock...
Cheyenne Corporation issued 1,700 $1,000 bonds at 103. Each bond was issued with one detachable stock...
Cheyenne Corporation issued 1,700 $1,000 bonds at 103. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling separately at 98. The market price of the warrants without the bonds cannot be determined. Use the incremental method to record the issuance of the bonds and warrants. (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...
Bonds with Detachable Warrants Langdon & Co. issues bonds with a face value of $50,000 for...
Bonds with Detachable Warrants Langdon & Co. issues bonds with a face value of $50,000 for $51,000. Each $1,000 bond carries 10 warrants, and each warrant allows the holder to acquire one share of $1 par common stock for $40 per share. Immediately after the issuance, the bonds are quoted at 99 ex rights and the warrants are quoted at $5 each. Calculate the value to be assigned to the bonds and to the warrants. Round your answers to two...
Shamrock Inc. has decided to raise additional capital by issuing $171,000 face value of bonds with...
Shamrock Inc. has decided to raise additional capital by issuing $171,000 face value of bonds with a coupon rate of 11%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $115,200, and the value of the warrants in the market is $28,800. The bonds...
Concord Inc. has decided to raise additional capital by issuing $189,000 face value of bonds with...
Concord Inc. has decided to raise additional capital by issuing $189,000 face value of bonds with a coupon rate of 9%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $131,750, and the value of the warrants in the market is $23,250. The bonds...
Crane Inc. has decided to raise additional capital by issuing $167,000 face value of bonds with...
Crane Inc. has decided to raise additional capital by issuing $167,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $143,650, and the value of the warrants in the market is $25,350. The bonds...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT