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Excercise 16-1 - Value of bonds plus warrants($10,000,000...

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EXERCISE 16-1 (15–20 minutes) 1. Cash ($10,000,000 X .99) ................................ 9,900,000 Discount on Bonds Payable .......................... 100,000 Bonds Payable ......................................... 10,000,000 Unamortized Bond Issue Costs ..................... 70,000 Cash .......................................................... 70,000 2. Cash ................................................................. 9,800,000 Discount on Bonds Payable .......................... 600,000 Bonds Payable ......................................... 10,000,000 Paid-in Capital—Stock Warrants ............ 400,000
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Unformatted text preview: Value of bonds plus warrants ($10,000,000 X .98) $9,800,000 Value of warrants (100,000 X $4) 400,000 Value of bonds $9,400,000 3. Debt Conversion Expense. ............................ 75,000 Bonds Payable. ............................................... 10,000,000 Discount on Bonds Payable. .................. 55,000 Common Stock. ........................................ 1,000,000 Paid-in Capital in Excess of Par. ............ 8,945,000* Cash. ......................................................... 75,000 *[($10,000,000 – $55,000) – $1,000,000]...
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