Problemon july 1 2016 salem corporation issued 3 million of, Ask an Expert

Accounting

Problem

On July 1, 2016, Salem Corporation issued $3 million of 12% bonds payable in 10 years. The bonds pay interest semiannually. The bonds include detachable warrants giving the bondholder the right to purchase for $30, one share of $1 par value common stock at any time during the next 10 years. Salem sold the bonds for $3 million. The value of the warrants at the time of issuance was $200,000.

Required:

Prepare in general journal format the entry to record the issuance of the bonds.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92719683

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