On December 1, 2020, Junction Company issued at 104, 800 of its 9%, 10-year, $1,000 par value, nonconvertible bonds with detachable stock purchase warrants. Each bond carried two detachable warrants; each warrant was for one share of common stock at a specified option price of $15 per share. Shortly after issuance, the warrants were quoted on the market for $3 each. No fair value can be determined for the bonds without the warrants. Interest is payable on December 1 and June 1. Provide the entry to record issuance of the bonds by Junction Company on December 1, 2020.

Junction Company

Journal Entry

December 1, 2020:

Debit Cash $832,000

Credit Bonds Payable $800,000

Credit Bonds Premium $27,038

Credit Warrants Liability $4,962

To record the issuance of the bonds.

Explanation:

a) Data and Calculations:

December 1, 2020:

Face value of nonconvertible bonds with detachable stock purchase warrants = $800,000

Issue price of bonds = $832,000 (1.04 * 800 * $1,000)

Number of bonds issue = 800

Par value per bond = $1,000

Maturity period = 10 years

Coupon interest rate = 10%

Option price of each warrant = $15 per common stock share

Market price of the option = $3

Value of warrant = $4,800 ($3 * 800 * 2)

Allocation of bond price:

Bonds = $827,038 ($800,000/$804,800 * $832,000)

Warrants = $4,962 ($4,800/$804,800 * $832,000)

moschino logo plaques womens high top sneaker red

shop 2018 moschino outlet online store, buy moschino logo plaques womens high top sneaker red with big discount, fast delivery and free worldwide

how does that happen,where u steel points