On July 1, 2021, Sunland Company issued for $9450000 a total of
90000 shares of $100 par value, 8% noncumulative preferred stock
along with one detachable warrant for each share issued. Each
warrant contains a right to purchase one share of Sunland $10 par
value common stock for $15 per share. The stock without the
warrants would normally sell for $9216000. The market price of the
rights on July 1, 2021, was $2.40 per right. On October 31, 2021,
when the market price of the common stock was $20 per share and the
market value of the rights was $3.10 per right, 36000 rights were
exercised. As a result of the exercise of the 36000 rights and the
issuance of the related common stock, what journal entry would
Sunland make?
| Cash |
540000 |
|
| Common Stock |
|
360000 |
| Paid-in Capital in Excess of Par |
|
180000 |
|
|
|
| Cash |
540000 |
|
| Paid-in Capital—Stock Warrants |
216000 |
|
| Common Stock |
|
360000 |
| Paid-in Capital in Excess of Par |
|
396000 |
|
|
|
| Cash |
540000 |
|
| Paid-in Capital—Stock Warrants |
133200 |
|
| Common Stock |
|
360000 |
| Paid-in Capital in Excess of Par |
|
313200 |
|
|
|
| Cash |
540000 |
|
| Paid-in Capital—Stock Warrants |
86400 |
|
| Common Stock |
|
360000 |
| Paid-in Capital in Excess of Par |
|
266400 |
|
|
|