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storchak [24]
2 years ago
13

Marigold Inc. has decided to raise additional capital by issuing $184,000 face value of bonds with a coupon rate of 9%. In discu

ssions 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 $144,900, and the value of the warrants in the market is $16,100. The bonds sold in the market at issuance for $144,500. (a) What entry should be made at the time of the issuance of the bonds and warrants
Business
1 answer:
shusha [124]2 years ago
6 0

Answer:

         Account Titles                                                  Debit                 Credit

         Cash                                                              $144,500

          Discount on Bonds Payable                       $‭53,941‬

          Bonds Payable                                                                      $184,000

          Paid-in Capital Stock Warrants                                            $  14,441                       

Working:

Discount on bonds payable = Bonds payable + Paid in capital stock warrant - cash

= 184,000 + 14,441 - 144,500

= $‭53,941‬

Value of bonds with warrants:

= 144,900 + 16,100

= $161,100

Value of warrants is therefore:

= Cash received / Value of bond with warrants * value of warrants

= 144,500 / 161,100 * 16,100

= $14,441

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Answer:

Bad debt expense A/c Dr  $4,900

           To Allowance for doubtful debts  $4,900

(Being bad debt expense is recorded)

Explanation:

The journal entry is shown below;

Bad debt expense A/c Dr  $4,900

           To Allowance for doubtful debts  $4,900

(Being bad debt expense is recorded)

The computation of the bad debt expense is shown below:

= Net Credit sales × estimated percentage given  - credit balance of allowance for doubtful debts

= $920,000 × 0.6%  - $620

= $5,520 - $620

= $4,900

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3 years ago
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2 years ago
All transactions ______. (Select all that apply.) Multiple select question. have at least two effects on the accounting equation
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All transactions b. affect assets, liabilities, and/or stockholders' equity, and d. must affect both assets and stockholders' equity.

<h3>What is the accounting equation?</h3>

The accounting equation shows that assets are equal to liabilities and equity.

The implication of the accounting equation is that every transaction has at least two effects on the elements of financial statements, given their linkages.

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The consumer sector is the largest part of the macroeconomy. Please select the best answer from the choices provided T F
cricket20 [7]
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3 years ago
For Year 2, Etzkorn Corporation's sales were $1,480,000, its gross margin was $580,000, its net operating income was $63,714, it
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Answer:

Return on equity = Net income/Shareholders' equity x 100

                            = $29,600/$829,000 x 100

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Explanation:

Return on equity is the ratio of net income to shareholders' equity. The net income = $29,600 and shareholders' equity = $829,000. The division of net income by shareholders' equity gives return on equity.

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