The stockholders' equity section of Cullumber Inc. at the beginning of the current year appears below. Common stock, $10 par value, authorized 953,000 shares, 284,000 shares issued and outstanding Paid-in capital in excess of par-common stock Retained earnings During the current year, the following transactions occurred. The company issued to the stockholders 99,000 rights. Ten rights are needed to buy one share of stock at $32. The rights were void after 30 days. The market price of the stock at this time was $34 per share. 1. 2. 3. 4. 5. 6. $2,840,000 644,000 578,000 (a) The company sold to the public a $198,000, 10% bond issue at 103. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common stock at $30 per share. Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $7. All but 4,950 of the rights issued in (1) were exercised in 30 days. At the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good standing. During the current year, the company granted stock options for 10,000 shares of common stock to company executives. The company, using a fair value option-pricing model, determines that each option is worth $10. The option price is $30. The options were to expire at year-end and were considered compensation for the current year. All but 1,000 shares related to the stock-option plan were exercised by year-end. The expiration resulted because one of the executives failed to fulfill an obligation related to the employment contract. Prepare general journal entries for the current year to record the transactions listed above. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Do not round intermediate calculations, Round answers to 0 decimal places, e.g. 5,125.)
The stockholders' equity section of Cullumber Inc. at the beginning of the current year appears below. Common stock, $10 par value, authorized 953,000 shares, 284,000 shares issued and outstanding Paid-in capital in excess of par-common stock Retained earnings During the current year, the following transactions occurred. The company issued to the stockholders 99,000 rights. Ten rights are needed to buy one share of stock at $32. The rights were void after 30 days. The market price of the stock at this time was $34 per share. 1. 2. 3. 4. 5. 6. $2,840,000 644,000 578,000 (a) The company sold to the public a $198,000, 10% bond issue at 103. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common stock at $30 per share. Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $7. All but 4,950 of the rights issued in (1) were exercised in 30 days. At the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good standing. During the current year, the company granted stock options for 10,000 shares of common stock to company executives. The company, using a fair value option-pricing model, determines that each option is worth $10. The option price is $30. The options were to expire at year-end and were considered compensation for the current year. All but 1,000 shares related to the stock-option plan were exercised by year-end. The expiration resulted because one of the executives failed to fulfill an obligation related to the employment contract. Prepare general journal entries for the current year to record the transactions listed above. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Do not round intermediate calculations, Round answers to 0 decimal places, e.g. 5,125.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not give solution in image format thanku
Transcribed Image Text:The stockholders' equity section of Cullumber Inc. at the beginning of the current year appears below.
Common stock, $10 par value, authorized 953,000 shares, 284,000 shares issued and outstanding
Paid-in capital in excess of par-common stock
Retained earnings
During the current year, the following transactions occurred.
The company issued to the stockholders 99,000 rights. Ten rights are needed to buy one share of stock at $32. The rights
were void after 30 days. The market price of the stock at this time was $34 per share.
1.
2.
3.
4.
5.
6.
$2,840,000
644,000
578,000
(a)
The company sold to the public a $198,000, 10% bond issue at 103. The company also issued with each $100 bond one
detachable stock purchase warrant, which provided for the purchase of common stock at $30 per share. Shortly after
issuance, similar bonds without warrants were selling at 96 and the warrants at $7.
All but 4,950 of the rights issued in (1) were exercised in 30 days.
At the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good
standing.
During the current year, the company granted stock options for 10,000 shares of common stock to company executives. The
company, using a fair value option-pricing model, determines that each option is worth $10. The option price is $30. The
options were to expire at year-end and were considered compensation for the current year.
All but 1,000 shares related to the stock-option plan were exercised by year-end. The expiration resulted because one of the
executives failed to fulfill an obligation related to the employment contract.
Prepare general journal entries for the current year to record the transactions listed above. (List all debit entries before
credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If
no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Do not round intermediate
calculations. Round answers to 0 decimal places, e.g. 5,125.)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education