ACC 304 All Assignments ACC 304 All Assignments | Page 62
5) Illiad Inc. has decided to raise additional capital by issuing
$176,300 face value of bonds with a coupon rate of 11%. In discussions
with investment bankers, it was determined that to help the sale of the
bonds, detachable stock warrants should be issued at the rate of one
warrant for each $100 bond sold. The value of the bonds without the
warrants is considered to be $139,570, and the value of the warrants in
the market is $24,630. The bonds sold in the market at issuance for
$156,000.
(a) What entry should be made at the time of 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
(b) Prepare the entry if the warrants were nondetachable. (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.)
6) Tweedie Company issues 10,500 shares of restricted stock to its
CFO, Mary Tokar, on January 1, 2014. The stock has a fair value of
$525,000 on this date. The service period related to this restricted stock
is 5 years. Vesting occurs if Tokar stays with the company until