1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
gulaghasi [49]
3 years ago
14

Prior, Inc. has decided to raise additional capital by issuing $175,000 face value of bonds with a coupon rate of 10%. In discus

sions with investment bankers, it was determined that to help the sale of bonds, detachable stock warrants should be issued at a rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $136,000, and the value of the warrants in the market is $24,000. The bonds sold in the market at issuance for $150,000.
a) What entry should be made at the time of the issuance of the bonds and warrants?

b) If the warrants were nondetachable, would the entries be different? Discuss.
Business
1 answer:
bogdanovich [222]3 years ago
8 0

Answer:

cash                 150,000 debit

discount on BP 47,500 debit

    bonds payable          175,000 credit

    warrants                      22,500 credit

If the warrants were undetachabel they wouln't be able to be transfer in a secondary market thus, they will not be traded the accounting will only the 150,000 as bonds an dthe diffrence with the 175,000 as discount.

cash                 150,000 debit

discount on BP 25,000 debit

       bonds payables      175,000 credit

Explanation:

136,000  bonds  136,000/160,000 = 0.85

<u>  24,000 </u>warrant 24,000 /160,000 = 0.15

160,000

bonds 150,000 x 0.85 = 127,500

discount on bonds: 175,000 - 127,500 = 47,500

warrants 150,000 x 0.15 = 22,500

You might be interested in
An American helicopter manufacturer contracted with a foreign hospital located in a severely war-torn region to sell five helico
sergij07 [2.7K]

Answer: Yes, because the helicopter manufacturer assumed the risk of the failure of the contract.

Explanation:

Based on the scenario given in the question, the subcontractor will likely prevail because the helicopter manufacturer assumed the risk of the failure of the contract.

Here, when the helicopter manufacturer entered into the contract with the subcontractor, the manufacturer was aware that the helicopters will be used in the "severely war-torn region.

In this case, the subcontractor wasn't aware of the information that the manufacturer knew of and therefore wasn't able to determine the risk that was involved in the contract.

7 0
3 years ago
On May 1, Melany contributed $7,000 and property, with an adjusted basis of $9,500 and a FMV of $11,500, for a 15% share of part
deff fn [24]

Answer:

her beginning basis is $16500.

Explanation:

basis of partnership

= money contributed + adjusted basis of equipment contributed

= $7000 + $9500

= $16500

Therefore, her beginning basis is $16500.

6 0
3 years ago
Byron runs a business cleaning gutters. lance, who is in a wheelchair, applies for a job working for byron as a cleaner. byron d
emmasim [6.3K]

In the given scenario, the person who is likely to win and have the upper hand is Lance. It is because Byron’s action is clearly showing a disability discrimination of which he clearly stated as to why he did not hired him in the first placed because of his disability.

6 0
3 years ago
Kentucky Fried Chicken, with 18,875 stores in 118 countries and territories around the world, changed their recipe (the spicines
Norma-Jean [14]

Because KFC changed their recipe (the spiciness) for various regions, this shows that multinational firms must develop every new product for potential worldwide distribution.

<h3>What is new product development?</h3>

A new product development refer to a firm process of bringing in a new product to the marketplace.

In conclusion, the development of new product helps in potential worldwide distribution.

Read more about product development

<em>brainly.com/question/7285931</em>

4 0
2 years ago
Olivia is really good at working with computers and has been helping at her mom's company by setting up and maintaining the empl
damaskus [11]

Answer: Information Support and Services

Explanation:

The information support and services personnel covers the following job specification; information technology deployment which entails the implementation of computer systems and software, database management, provision of technical assistance related to computer systems and managing of information systems.

Since Olivia is able to set up her mother's computer network in her business, she can look into Information Support and Services because it covers the field for that

4 0
3 years ago
Other questions:
  • A white college receptionist is fired when it is found that she told a black college applicant that the applications for admissi
    7·1 answer
  • Seeing these questions my school makes us seem uneducated
    11·1 answer
  • If Digipics were to begin selling the cameras it assembled directly to customers through a website operated by the company, this
    15·1 answer
  • Choose some specific types of changes you would like to see happen in groups or organizations with which you are familiar. Imagi
    12·1 answer
  • Show the total cost expression and calculate the EOQ for an item with holding cost rate 18%, unit cost $8.00, annual demand of 4
    15·1 answer
  • Daniel has a marginal tax rate of 22​% and itemizes his deductions. He suddenly realizes that he neglected to include a ​$1 comm
    6·1 answer
  • Ether Inc., an electronics manufacturer, offers free T-shirts with the company's logo on them free of charge to its customers. E
    15·1 answer
  • In general, a larger R squared tends to suggest that:_______.
    6·1 answer
  • Time value of money is an important aspect of money management. Why is it important to know what interest rates, terms of an agr
    14·1 answer
  • Can a person work as an agent for two different people with conflicting interests?
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!