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On May 31, 2011, Core Company issued 1,000, 14%, 10-year $1,000 bonds at 105. Each bond was issued with one detachable stock warrant. Shortly after issuance, the bonds were selling at 102, but the market value of the warrants cannot be determined.

Instructions

(a) Prepare the entry to record the issuance of the bonds and warrants.

(b) Assume the same facts as part (a), except that the warrants had a fair value of $8. Prepare the entry to record the issuance of the bonds and warrants.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M944127

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