SOLUTIONS Chapter 16

SOLUTIONS Chapter 16 - SOLUTIONS Chapter 16 BRIEF EXERCISE...

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Unformatted text preview: SOLUTIONS Chapter 16 BRIEF EXERCISE 16-1 Cash ....................................................................................... 3,960,000 Discount on Bonds Payable ...................................................................... 40,000 Bonds Payable ................................................................................ 4,000,000 BRIEF EXERCISE 16-2 Bonds Payable ......................................................................................... 2,000,000 Discount on Bonds Payable ........................................................... 30,000 Common Stock (2,000 X 50 X $10) ................................................ 1,000,000 Paid-in Capital in Excess of Par ..................................................... 970,000 BRIEF EXERCISE 16-3 Preferred Stock (1,000 X $50) .................................................................. 50,000 Paid-in Capital in Excess of ParPreferred Stock ($60 $50) X 1,000 ..................................................................... 10,000 Common Stock (2,000 X $10) ......................................................... 20,000 Paid-in Capital in Excess of Par Common Stock ($60 X 1,000) (2,000 X $10) ................................................... 40,000 BRIEF EXERCISE 16-4 Cash ........................................................................................................ 2,020,000 Discount on Bonds Payable ($2,000,000 $1,940,784) ................................................................... 59,216 Bonds Payable ................................................................................ 2,000,000 Paid-in CapitalStock Warrants .................................................... 79,216 FMV of bonds (2,000 X $1,000 X .98) ...................................................... $1,960,000 FMV of warrants (2,000 X $40) ................................................................ Aggregate FMV ........................................................................................ $2,040,000 80,000 Allocated to bonds ($1,960/$2,040 X $2,020,000) .................................. $1,940,784 Allocated to warrants ($80/$2,040 X $2,020,000) .................................. $2,020,000 79,216 Cash .................................................................................................... 2,020,000 BRIEF EXERCISE 16-5 Discount on Bonds Payable [$2,000,000 X (1 .98)] .................................................................... 40,000 Bonds Payable ............................................................................ 2,000,000 Paid-in CapitalStock Warrants ................................................ 60,000* *$2,000,000 X (1.01 .98) BRIEF EXERCISE 16-6 1/1/10 No entry 12/31/10 Compensation Expense ...................................................... 75,000 Paid-in CapitalStock Options ......................... 75,000 12/31/11 Compensation Expense ...................................................... Compensation Expense ....
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This note was uploaded on 03/16/2010 for the course BUSACC 1205 taught by Professor Boyas during the Spring '10 term at Pittsburgh.

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SOLUTIONS Chapter 16 - SOLUTIONS Chapter 16 BRIEF EXERCISE...

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