Chapter 16 - SOLUTIONS TO EXERCISES EXERCISE 16-1 1...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
SOLUTIONS TO EXERCISES EXERCISE 16-1 1. Cash ($20,000,000 X .99). ............................... 19,800,000 Discount on Bonds Payable. ......................... 200,000 Bonds Payable. ........................................ 20,000,000 Unamortized Bond Issue Costs . ................... 70,000 Cash. ......................................................... 70,000 2. Cash. ................................................................ 19,600,000 Discount on Bonds Payable. ......................... 1,200,000 Bonds Payable. ........................................ 20,000,000 Paid-in Capital—Stock Warrants. ........... 800,000 Value of bonds plus warrants ($20,000,000 X .98) $19,600,000 Value of warrants (200,000 X $4) 800,000 Value of bonds $18,800,000 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]
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
EXERCISE 16-9 (a) Cash ($2,000,000 X 1.02). .......................... 2,040,000 Discount on Bonds Payable. .................... 40,000 [(1 – .98) X $2,000,000] Bonds Payable. ..................................... 2,000,000 Paid-in Capital—Stock Warrants. ........ 80,000* *$2,040,000 – ($2,000,000 X .98) (b) Market value of bonds without warrants $1,960,000 ($2,000,000 X .98) Market value of warrants (2,000 X $30) 60,000 Total market value $2,020,000 $1,960,000 $2,020,000 X $2,040,000 = $1,979,406 Value assigned to bonds $60,000 $2,020,000 X $2,040,000 = $ 60,594 Value assigned to warrants $2,040,000 Total Cash . ........................................................................ 2,040,000 Discount on Bonds Payable . ................................. 20,594 Bonds Payable. ................................................... 2,000,000 Paid-in Capital—Stock Warrants. ...................... 60,594
Background image of page 2
1/1/08 No entry 12/31/08 Compensation Expense . ................................... 175,000 Paid-in Capital—Stock Options . ............ 175,000 ($350,000 X 1/2) (To recognize compensation expense for 2008) 4/1/09 Paid-in Capital—Stock Options . ....................... 17,500 Compensation Expense . ........................ 17,500 ($175,000 X 2,000/20,000) (To record termination of stock options held by resigned employees) 12/31/09 Compensation Expense . ................................... 157,500 Paid-in Capital—Stock Options . ............ 157,500 ($350,000 X 1 / 2 X 18 / 20 ) (To recognize compensation expense for 2009) 3/31/10 Cash (12,000 X $25). ........................................... 300,000 Paid-in Capital—Stock Options . ....................... 210,000 ($350,000 X 12,000/20,000) Common Stock. ....................................... 120,000 Paid-in Capital in Excess of Par . ........... 390,000
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 13

Chapter 16 - SOLUTIONS TO EXERCISES EXERCISE 16-1 1...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online