FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Please do not give image format and do not use chatgpt tool
Date
Jan. 1, 2020
Jun. 30, 2020
Account Titles and Explanation
Cash
Bonds Payable
Contributed Surplus - Stock Warrants
Cash
Contributed Surplus - Stock Options
Common Shares
Debit
Credit
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Transcribed Image Text:Date Jan. 1, 2020 Jun. 30, 2020 Account Titles and Explanation Cash Bonds Payable Contributed Surplus - Stock Warrants Cash Contributed Surplus - Stock Options Common Shares Debit Credit
Sarasota Corporation issued 5,400,
five year, 3% bonds at 104 on January
1, 2020. Interest is paid annually. Each
$1,000 bond carried one detachable
warrant allowing the holder to
purchase 100 common shares in
Sarasota at $10 per share, the price at
which Sarasota shares were trading on
the day of the sale of the bonds.
Similar straight bonds trading on the
open market paid 6%. On June 30,
2020, 1,080 of the bond holders
exercised the options to buy the
shares.
Prepare the journal entries to record
these events.
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Transcribed Image Text:Sarasota Corporation issued 5,400, five year, 3% bonds at 104 on January 1, 2020. Interest is paid annually. Each $1,000 bond carried one detachable warrant allowing the holder to purchase 100 common shares in Sarasota at $10 per share, the price at which Sarasota shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 6%. On June 30, 2020, 1,080 of the bond holders exercised the options to buy the shares. Prepare the journal entries to record these events.
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