SCREEN PKINTER VERSON Exercise 160 on September 1 2017 Vaugh

SCREEN PKINTER VERSON Exercise 16-0 on September 1 2017 Vaughn Com any sold at 104 plus accrued intere 4 0 o its 99 10-year, $1,000 ace value, no convertible bonds with detachable stock ama ts. Each bond carried t o detachable warrants. Each amant as or one share of common stock at a speciied option price of s14 per share. Shortly after Issuance, the warrants were quoted on the market for $3 each. No fair value can be determined for the Vaughn Company bands. Interest ls payable on December 1 and une 1. Bond issue costs of $23,900 were Inourred Prepare in general journal format the entry to record the lssuance of the bands. (Credit account titles are automatically Indented when aiount is entered. Do not indent onanualy. It no entry is required, sclect \"No Entry for the accomt tities and enter o for the aniounts.) Account Titles and Explanation Debit Credit Click if you would like to Show Work for this question: Onen Show rk Question Attempts: of 3 aced SAVE FOR LATER rsion 4.244.5 O Type here to search

Solution

Journal Entry :-

Calculation Premium on bonds Payable :-

Date	Particulars	Debit($)	Credit($)
	Cash A/c Dr.	4438600
	Unamortised bonds issue costs A/c Dr.	23900
	To Bonds Payable A/c (4200*$1000)		4200000
	To Premium on bonds payable A/c		142800
	To Stock warrants A/c (4200*2*3)		25200
	To Bond interest Expense A/c(4200*1000*9%*(3/12))		94500