On May 1, 2022, Logan Co. issued $300,000 of 7% bonds at 102, which are due on April 30, 2032. Twenty detachable stock warrants-each of which entitle the holder to purchase one share of Logan's common stock ($15 par value) for $43-were attached to each $1,000 bond. The bonds without the warrants would sell at 99. On May 1, 2022, the fair value of Logan's common stock was $35 per share and the fair value of the warrants was $2 per warrant. Use the appropriate method to allocate the proceeds from the bond issuance, and prepare the journal entry to record the issuance.

On May 1, 2022, Logan Co. issued $300,000 of 7% bonds at 102, which are due on April 30, 2032. Twenty detachable stock warrants-each of which entitle the holder to purchase one share of Logan's common stock ($15 par value) for $43-were attached to each $1,000 bond. The bonds without the warrants would sell at 99. On May 1, 2022, the fair value of Logan's common stock was $35 per share and the fair value of the warrants was $2 per warrant. Use the appropriate method to allocate the proceeds from the bond issuance, and prepare the journal entry to record the issuance.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter7: Financial Activities

Section: Chapter Questions

Problem 11QE

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