Homework Answers
| a | |||
| Cash | 152000 | ||
| Discount on bonds payable | 40800 | ||
| Bonds payable | 170000 | ||
| Paid in capital-Stock Warrants | 22800 | =152000/(136000+24000)*24000 | |
| b | |||
| Cash | 152000 | ||
| Discount on bonds payable | 18000 | ||
| Bonds payable | 170000 | ||
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E16-7 (L02) (Issuance of Bonds with Warrants) Illiad Inc. has decided to raise additional capital by...
Shamrock Inc. has decided to raise additional capital by issuing $171,000 face value of bonds with...
Shamrock Inc. has decided to raise additional capital by issuing $171,000 face value of bonds with a coupon rate of 11%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $115,200, and the value of the warrants in the market is $28,800. The bonds...
a) What entry should be made at the time of the issuance of the bonds and...
a) What entry should be made at the time of the issuance of
the bonds and warrants?
b) If the warrants were nondetachable, would the entries be
different? Discuss.
E16.7 (LO 2) (Issuance of Bonds with Warrants) Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of bonds with a coupon rate of 10%. In discussions with investment bank- ers, it was determined that to help the sale of the bonds, detachable stock warrants should be...
Exercise 16-07 Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of...
Exercise 16-07 Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $136,000, and the value of the warrants in the market is $24,000....
Ayayai Inc. has decided to raise additional capital by issuing $185,000 face value of bonds with...
Ayayai Inc. has decided to raise additional capital by issuing $185,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $138,400, and the value of the warrants in the market is $34,600. The bond...
Bridgeport Inc. has decided to raise additional capital by issuing $167,000 face value of bonds with...
Bridgeport Inc. has decided to raise additional capital by issuing $167,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $118,400, and the value of the warrants in the market is $29,600. The bonds...
Pina Inc. has decided to raise additional capital by issuing $168,000 face value of bonds with...
Pina Inc. has decided to raise additional capital by issuing
$168,000 face value of bonds with a coupon rate of 9%. In
discussions with investment bankers, it was determined that to help
the sale of the bonds, detachable stock warrants should be issued
at the rate of one warrant for each $100 bond sold. The value of
the bonds without the warrants is considered to be $154,800, and
the value of the warrants in the market is $17,200. The bonds...
Sandhill Inc. has decided to raise additional capital by issuing $187,000 face value of bonds with...
Sandhill Inc. has decided to raise additional capital by issuing
$187,000 face value of bonds with a coupon rate of 9%. In
discussions with investment bankers, it was determined that to help
the sale of the bonds, detachable stock warrants should be issued
at the rate of one warrant for each $100 bond sold. The value of
the bonds without the warrants is considered to be $121,600, and
the value of the warrants in the market is $30,400. The bonds...
Coronado Inc. has decided to raise additional capital by issuing $168,000 face value of bonds with...
Coronado Inc. has decided to raise additional capital by issuing $168,000 face value of bonds with a coupon rate of 9%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $138,550, and the value of the warrants in the market is $24.450. The bonds...
Nash Inc. has decided to raise additional capital by Issuing $168.000 face value of bonds with...
Nash Inc. has decided to raise additional capital by Issuing $168.000 face value of bonds with a coupon rate of 9%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $154,800, and the value of the warrants in the market is $17.200. The bonds...
E16-8 (L02) (Issuance of Bonds with Detachable Warrants) On September 1, 2017, Sands Company sold at...
E16-8 (L02) (Issuance of Bonds with Detachable Warrants) On September 1, 2017, Sands Company sold at 104 (plus accrued interest) 4,000 of its 9%, 10-year, $1,000 face value, nonconvertible bonds with detachable stock warrants. Each bond carried two detachable warrants. Each warrant was for one share of common stock at a specified option price of $15 per share. Shortly after issuance, the warrants were quoted on the market for $3 each. No fair value can be determined for the Sands...
a) What entry should be made at the time of the issuance of
the bonds and warrants?
b) If the warrants were nondetachable, would the entries be
different? Discuss.
E16.7 (LO 2) (Issuance of Bonds with Warrants) Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of bonds with a coupon rate of 10%. In discussions with investment bank- ers, it was determined that to help the sale of the bonds, detachable stock warrants should be...
Exercise 16-07 Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $136,000, and the value of the warrants in the market is $24,000....
Ayayai Inc. has decided to raise additional capital by issuing $185,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $138,400, and the value of the warrants in the market is $34,600. The bond...
Bridgeport Inc. has decided to raise additional capital by issuing $167,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $118,400, and the value of the warrants in the market is $29,600. The bonds...
Pina Inc. has decided to raise additional capital by issuing
$168,000 face value of bonds with a coupon rate of 9%. In
discussions with investment bankers, it was determined that to help
the sale of the bonds, detachable stock warrants should be issued
at the rate of one warrant for each $100 bond sold. The value of
the bonds without the warrants is considered to be $154,800, and
the value of the warrants in the market is $17,200. The bonds...
Sandhill Inc. has decided to raise additional capital by issuing
$187,000 face value of bonds with a coupon rate of 9%. In
discussions with investment bankers, it was determined that to help
the sale of the bonds, detachable stock warrants should be issued
at the rate of one warrant for each $100 bond sold. The value of
the bonds without the warrants is considered to be $121,600, and
the value of the warrants in the market is $30,400. The bonds...
Coronado Inc. has decided to raise additional capital by issuing $168,000 face value of bonds with a coupon rate of 9%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $138,550, and the value of the warrants in the market is $24.450. The bonds...
Nash Inc. has decided to raise additional capital by Issuing $168.000 face value of bonds with a coupon rate of 9%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $154,800, and the value of the warrants in the market is $17.200. The bonds...
E16-8 (L02) (Issuance of Bonds with Detachable Warrants) On September 1, 2017, Sands Company sold at 104 (plus accrued interest) 4,000 of its 9%, 10-year, $1,000 face value, nonconvertible bonds with detachable stock warrants. Each bond carried two detachable warrants. Each warrant was for one share of common stock at a specified option price of $15 per share. Shortly after issuance, the warrants were quoted on the market for $3 each. No fair value can be determined for the Sands...
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