Problem 11 Irish, Inc. issues 1,000 shares of $100 par, 10% preferred stock with detachable warrants....

Question

Question

Problem 11 Irish, Inc. issues 1,000 shares of $100 par, 10% preferred stock with detachable warrants. The package of one shar

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

	Calculation
	Particulars	Rate	No	Amount
1	Market Value of Preferred stock without warrant	108	1000	108000
2	Market Value of warrant	12	1000	12000
				120000
	Value is apportioned based on Market Value
	Value of Package	110	1000	110000

	Value of Preferred Stock (110000/120000 x 108000)			99000
	Value of Warrant (110000/120000 x 12000)			11000

1	Journal Entry on issue
	Bank A/c Dr		110000
	To Preferred Stock			99000
	To warrants			11000

2	Journal Entry on exercise
	Bank A/c Dr (600 x 5 x 40)		120000
	Warrant A/c Dr (11000 x 60%)		6600
	To Common Stock			126600

3	Journal Entry on expiry
	Warrant A/c Dr		4400
	TO additional paid in capital			4400

Add a comment

Answer 2

Similar Homework Help Questions

Problem 11 Irish, Inc. issues 1,000 shares of $100 par, 10% preferred stock with detachable warrants....

Problem 11 Irish, Inc. issues 1,000 shares of $100 par, 10% preferred stock with detachable warrants. The package of one share of stock and one warrant sells for $110. Each warrant enables the holder to purchase five shares of no-par common stock at $40 per share. Immediately following the issuance of the stock, the stock warrants are selling are selling at $12 per warrant. The market value of the preferred stock without the warrants is $108 per share. Prepare the...
Work Out Problem: 1. Albert Corp. issued 2,000 shares of $50 par value preferred stock at...

Work Out Problem: 1. Albert Corp. issued 2,000 shares of $50 par value preferred stock at $ 70 per share on 3/1/2017. A warrant is attached to each share of preferred stock to allow the holder to purchase one share of $1 par common stock at $20 per share. Immediately after the issuance, the preferred stock began selling ex-right on the market for $68 per share while the warrant began selling for $5 per share. On 4/20/2017, 1,000 warrants were...
Dilutive Securities and EPS Worksheets Part 1: Convertible Securities and Detachable Warrants I. JAMC Corp. issues...

Dilutive Securities and EPS Worksheets Part 1: Convertible Securities and Detachable Warrants I. JAMC Corp. issues $10,000,000 of bonds on May 24, 2018 at a discount of $600,000. Interest on the bonds is payable each October 24 and May 24 Each $1,000 bond (i.e., there were 10,000 issued) is convertible to 20 shares of common stock (par value $3). On October 24, 2022, 2,000 of the bonds are converted. At the time of the conversion, the total remaining unamortized discount...

II. Work-Out Problems (31 points) 1. (6 points) Albert Corp. issued 2,000 shares of $50 par value preferred stock...

II. Work-Out Problems (31 points) 1. (6 points) Albert Corp. issued 2,000 shares of $50 par value preferred stock at $70 per share on 3/1/2017. A warrant is attached to cach share of preferred stock to allow the holder to purchase one share of S1 par common stock at S20 per share. Immediate after the issuance, the preferred began selling ex-right on the market for $68 per share while the warrant began selling for $5 per share. On 4/20/2017, 1,000...
Bonds with Detachable Warrants: Langdon & co. issues bonds with a face value of $50,000 for...

Bonds with Detachable Warrants: Langdon & co. issues bonds with a face value of $50,000 for $51000. each $1000 bond carries 10 warrants, and each warrant allows the holder to acquire one share of $1 par common stock for $40 per share. immediately after the issuance, the bonds are quoted at 99 ex rights and the warrants are quoted at $5 each. Calculate the value to be assigned to the bonds and to the warrants. value assigned to bonds value...
15-2 major expansion of production facilities is necessary. Nichols plans suing 10.000 shares of $50 par...

15-2 major expansion of production facilities is necessary. Nichols plans suing 10.000 shares of $50 par preferred stock and 50,000 were previously authorized but have not yet been issued. Prepare journal entries to record all the transactions related to 1. the preferred stock 2. the common stock P15-2 Stock Rights to Shareholders Nichols Electronics Corporation LO 15.3 for its products. In order to meet this demand, a major expansion of production + Nichols Electronics Corporation has been experiencing a steadily...

Please help.Thanks Stock Rights to Shareholders Nichols Electronics Corporation has been experiencing a steadily growing demand...

Please help.Thanks Stock Rights to Shareholders Nichols Electronics Corporation has been experiencing a steadily growing demand for its products. In order to meet this demand, a major expansion of production facilities is necessary. Nichols plans to raise the money for this proposed expansion by issuing 10,000 shares of $50 par preferred stock and 50,000 shares of $10 par common stock. These shares were previously authorized but have not yet been issued 3 There are presently 200,000 shares of $10 par...
Larkspur Inc. issues 500 shares of $10 par value common stock and 100 shares of $100...

Larkspur Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $104,000. (a) Prepare the journal entry for the issuance when the market price of the common shares is $164 each and market price of the preferred is $205 each. (b) Prepare the journal entry for the issuance when only the market price of the common stock is known and it is $178 per share.
Flounder Inc. issues 500 shares of $10 par value common stock and 100 shares of $100...

Flounder Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $109,000. (a) Prepare the journal entry for the issuance when the market price of the common shares is $172 each and market price of the preferred is $215 each. (b) Prepare the journal entry for the issuance when only the market price of the common stock is known and it is $188 per share.

Vaughn Inc. issues 500 shares of $10 par value common stock and 100 shares of $100...

Vaughn Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $116,000. (a) Prepare the journal entry for the issuance when the market price of the common shares is $164 each and market price of the preferred is $205 each. (b) Prepare the journal entry for the issuance when only the market price of the common stock is known and it is $202 per share.

Problem 11 Irish, Inc. issues 1,000 shares of $100 par, 10% preferred stock with detachable warrants....

Homework Answers