Next, record the entry for issuance of the bonds. Note: Use the proportion of toal EXACTLY as displayed in your calculations below. b. Record the entry for the subsequent exercise of the 18,000 stock purchase warrants on January 2 of Year 1. Date Account Name Jan. 1, Year 1 Cash Bonds Payable Date Paid-in Capital-Stock Warrants Premium on Bonds Payable To record bond issuance Jan. 2, Year 1 Cash Check Account Name Paid-in Capital-Stock Warrants Common Stock Paid-in Capital in Excess of Par-Common Stock To record conversion of warrants Dr. Cr. 954,000 0 ✓ 0 900,000 0 3,600 x 0 54,000 x Dr. 1,080,000 Cr. v 53,000 0 x 0 900,000 v 0 180,000 x Recording Entries for Bonds with Detachable Warrants On January 1 of Year 1, Friday Corporation issued $900,000 of 6%, nonconvertible bonds dated January 1 with detachable stock purchase warrants at a price of 106. Each $1,000 bond carries 20 detachable stock purchase warrants, each of which calls for the purchase of one share of Friday's common stock, par $50, at the specified exercise price of $60 per share. Upon issuance, the detachable stock purchase warrants were immediately quoted at $1 each in the market, and the bonds were quoted at 102 without the warrants. Required a. First, calculate the allocation proportion for both bonds and warrants. Total Amount Proportion of Total Bonds Warrants 918,000 98% 18,000 936,000 100% Next, record the entry for issuance of the bonds. •Note: Use the proportion of toal EXACTLY as displayed in your calculations below. b. Record the entry for the subsequent exercise of the 18,000 stock purchase warrants on January 2 of Year 1.

On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The bonds had a stated rate of 6% and paid interest semi-annually. What is the journal entry to record the first payment to the bondholders?

Willoughby Inc. issued 100 bonds with a face value of $1,000 and a stated rate of 4% and received $105,000. What is the journal entry to record the sale of the bonds?

On January 1, a company issued a 5-year $100,000 bond at 6%. Interest payments on the bond of $6,000 are to be made annually. If the company received proceeds of $112,300, how would the bonds issuance be quoted? A. 1.123 B. 112.30 C. 0.890 D. 89.05

Medhurst Corporation issued $90,000 in bonds for $87,000. The bonds had a stated rate of 8% and pay interest quarterly. What is the journal entry to record the sale of the bonds?

Piedmont Corporation issued $200,000 of 10-year bonds at par. The bonds have a stated rate of 6% and pay interest annually. What is the journal entry to record the first interest payment to the bondholders?

Pinetop Corporation issued $150,000 10-year bonds at par. The bonds have a stated rate of 6% and pay interest annually. What is the journal entry to record the sale of the bonds?

Waldron Inc. issued $400,000 bonds with a stated rate of 7% when the market rate was 5%. They are 3-year bonds with interest to be paid annually. Prepare a table to amortize the premium of the bonds. Assume that the bonds were issued for $421,844.

Bats Corporation issued 800,000 of 12% face value bonds for 851,705.70. The bonds were dated and issued on April 1, 2019, are due March 31, 2023, and pay interest semiannually on September 30 and March 31. Bats sold the bonds to yield 10%. Required: 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. 3. Prepare any adjusting entries for the end of the fiscal year, December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. Assume the company retires the bonds on June 30, 2020, at 103 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight-line method of amortization b. effective interest method of amortization

On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be converted into 20 shares of the companys 5 par value stock. On July 3, 2020, when the bonds had an unamortized discount of 7,400 and the market value of the McGraw shares was 52 per share, all the bonds were converted into common stock. Required: 1. Prepare the journal entry to record the conversion of the bonds under (a) the book value method and (b) the market value method. 2. Compute the companys debt-to-equity ratio (total liabilities divided by total shareholders equity, as described in Chapter 6) under each alternative. Assume the companys other liabilities are 2 million and shareholders equity before the conversion is 3 million. 3. Assume the company uses IFRS and issued the bonds for 487,500 on July 2, 2018. On this date, it determined that the fair value of each bond was 930 and the fair value of the conversion option was 45 per bond. Prepare the journal entry to record the issuance of the bonds.