Business, 24.03.2020 20:05 isabeltorres5

On May 1, 2020, Flint Company issued 1,500 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Shortly after issuance, the bonds were selling at 98, but the fair value of the warrants cannot be determined.

a. Prepare the entry to record the issuance of the bonds and warrants

b. Assune the same facts as part (a), except that the warrants had a fair value of $30. Prepare the entry to record the issuance of the bonds and warrants.

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Answer from: stressedstudent6402

a. Prepare the entry to record the issuance of the bonds and warrants

Cash received on issuance of 1,500 $1,000 bonds at 102 = $1,500,000

Account Title Debit Credit

Cash ($1,500,000 X 1.02) 1,530,000

Discount on Bonds Payable 30,000

[(1 – .98) X $1,500,000]

Bonds Payable 1,500,000

Paid-in Capital—Stock Warrants 60,000

[$1,530,000 – ($1,500,000 X .98)

b. Assume the same facts as part (a), except that the warrants had a fair value of $30. Prepare the entry to record the issuance of the bonds and warrants.

Market value of bonds without warrants $1,470,000

($1,500,000 X .98)

Market value of warrants (1,500 X $30) 45,000

Total market value $1,515,000

Value assigned to bonds = 1,470,000/1,515,000 x $1,530,000 = $1,484,554

Value assigned to warrants = 45,000/1,515,000 X $1,530,000 = 45,446

Account Title Debit Credit

Cash 1,530,000

Discount on Bonds Payable

($1,500,000 – $1,484,554) 15,446

Bonds Payable 1,500,000

Paid-in Capital—Stock Warrants 45,446

Answer from: Quest

the definition of a small business is an independently owned and operated company that is limited in size and in revenue depending on the industry. a local bakery that employs 10 people is an example of a small business. a manufacturing facility that employees less than 500 people is an example of a small business.

Answer from: Quest

answer blank(1).(2); sharpe;

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On May 1, 2020, Flint Company issued 1,500 $1,000 bonds at 102. Each bond was issued with one detach...