Brief Exercise 165 Buffalo Corporation issued 2300 1000 bond

Brief Exercise 16-5

Buffalo Corporation issued 2,300 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling separately at 98. The market price of the warrants without the bonds cannot be determined.

Use the incremental method to record the issuance of the bonds and warrants. (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.)

Account Titles and Explanation

Debit

Credit

Open Show Work

Account Titles and Explanation	Debit	Credit

Solution

Account Title Debit Credit Cash(2300*1000*102/100) 2346000 Discount on bonds payable(2300*(1000-980)) 46000 Bonds payable(2300*1000) 2300000 Paid-in capital-Stock warrants(2300*(1020-980)) 92000