Question

E14-19 (book/static) DHC Associates issued 2,100 of its $1,000, 8%, 5-year par value bonds. There are no bond issue costs. Interest is paid annually. The market rate on the date of issue was 9%. The market price of DHC common shares on the date that the bonds are issued is $50 per share. The bonds were sold with 50,000 warrants to acquire 50,000 shares of the company's $1 par value common stock for $40 per share. That is, each bond carries 25 warrants. DHC has existing bonds outstanding that trade without warrants at $920. There are other DHC warrants outstanding that trade for $40 each. Requirement c. Prepare the journal entry to record the issuance of the bonds assuming that the warrants are detachable using the proportional method. (Record debits first, then credits. Exclude explanations from any journal entries. Round any intermediary calculations to the nearest whole percent, X%. Round the amount you enter into the input cell to the nearest whole dollar.) Account | Date of issue Cash | 2,018,317 Discount on Bonds Payable | 1,108,294 Additional Paid-in Capital - Stock Warrants | 1,026,611 Bond Payable | 2,100,000

          E14-19 (book/static)
DHC Associates issued 2,100 of its $1,000, 8%, 5-year par value bonds. There are no bond issue costs. Interest is paid annually. The market rate on the date of issue was 9%. The market price of DHC common shares on the date that the bonds are issued is $50 per share. The bonds were sold with 50,000 warrants to acquire 50,000 shares of the company's $1 par value common stock for $40 per share. That is, each bond carries 25 warrants. DHC has existing bonds outstanding that trade without warrants at $920. There are other DHC warrants outstanding that trade for $40 each.

Requirement c. Prepare the journal entry to record the issuance of the bonds assuming that the warrants are detachable using the proportional method. (Record debits first, then credits. Exclude explanations from any journal entries. Round any intermediary calculations to the nearest whole percent, X%. Round the amount you enter into the input cell to the nearest whole dollar.)

Account | Date of issue
Cash | 2,018,317
Discount on Bonds Payable | 1,108,294
Additional Paid-in Capital - Stock Warrants | 1,026,611
Bond Payable | 2,100,000

E14-19 (book/static)
DHC Associates issued 2,100 of its 1,000, 8%, 5-year par value bonds. There are no bond issue costs. Interest is paid annually. The market rate on the date of issue was 9%. The market price of DHC common shares on the date that the bonds are issued is $50 per share. The bonds were sold with 50,000 warrants to acquire 50,000 shares of the company's $1 par value common stock for $40 per share. That is, each bond carries 25 warrants. DHC has existing bonds outstanding that trade without warrants at $920. There are other DHC warrants outstanding that trade for $40 each.

Requirement c. Prepare the journal entry to record the issuance of the bonds assuming that the warrants are detachable using the proportional method. (Record debits first, then credits. Exclude explanations from any journal entries. Round any intermediary calculations to the nearest whole percent, X%. Round the amount you enter into the input cell to the nearest whole dollar.)

Account | Date of issue
Cash | 2,018,317
Discount on Bonds Payable | 1,108,294
Additional Paid-in Capital - Stock Warrants | 1,026,611
Bond Payable | 2,100,000

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