Sunland Corporation issued 6,000, five year, 3% bonds at 103 on January 1, 2023. Interest is paid annually. Each $1,000 bond carried one detachable warrant allowing the holder to purchase 100 common shares in Sunland at $9 per share, the price at which Sunland 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, 2023, 1,200 of the bond holders exercised the options to buy the shares. Prepare the journal entries to record these events. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places eg. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date January 1, 2023 June 30, 2023 Account Titles and Explanation Cash Bonds Payable Contributed Surplus - Stock Warrants Cash Contributed Surplus - Stock Warrants Common Shares Debit 6180000 Credit

Sunland Corporation issued 6,000, five year, 3% bonds at 103 on January 1, 2023. Interest is paid annually. Each $1,000 bond carried one detachable warrant allowing the holder to purchase 100 common shares in Sunland at $9 per share, the price at which Sunland 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, 2023, 1,200 of the bond holders exercised the options to buy the shares. Prepare the journal entries to record these events. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places eg. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date January 1, 2023 June 30, 2023 Account Titles and Explanation Cash Bonds Payable Contributed Surplus - Stock Warrants Cash Contributed Surplus - Stock Warrants Common Shares Debit 6180000 Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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