CH 16 Solutions(1) - EXERCISE 16-1 1. 9,900,000 100,000...

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EXERCISE 16-1 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 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] EXERCISE 16-7 (a) $136,000 X $150,000 = $127,500 Value assigned to bonds $136,000 + $24,000 $24,000
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X $150,000 = $22,500 $150,000 Value assigned to warrants Total $136,000 + $24,000 Cash ............................................................... 150,000 Discount on Bonds Payable. ................................. 47,500 Bonds Payable. .................................................. 175,000
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This note was uploaded on 10/24/2011 for the course ACCT 316 taught by Professor Debessay,a during the Spring '08 term at University of Delaware.

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CH 16 Solutions(1) - EXERCISE 16-1 1. 9,900,000 100,000...

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