Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on august 1, 2021, limbaugh communications issued

On August 1, 2021, Limbaugh Communications issued $22 million of 11% nonconvertible bonds at 105....

80.2K

Verified Solution

Question

Accounting

On August 1, 2021, Limbaugh Communications issued $22 million of 11% nonconvertible bonds at 105. The bonds are due on July 31, 2041. Each $1,000 bond was issued with 40 detachable stock warrants, each of which entitled the bondholder to purchase, for $50, one share of Limbaugh Communications no par common stock. Interstate Containers purchased 20% of the bond issue. On August 1, 2021, the market value of the common stock was $48 per share and the market value of each warrant was $10. In February 2032, when Limbaughs common stock had a market price of $62 per share and the unamortized discount balance was $2 million, Interstate Containers exercised the warrants it held.

Required: 1. Prepare the journal entries on August 1, 2021, to record (a) the issuance of the bonds by Limbaugh and (b) the investment by Interstate. 2. Prepare the journal entries for both Limbaugh and Interstate in February 2032, to record the exercise of the warrants.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

1. Starting with a sample of a fine pearlitic steel, describe the most efficient way to...

Mechanical Engineering
Q

c Decide whether the figure is a quadrilateral This is a quadrilateral This is not...

Geometry
Q

iple 13 Which of the following numbers is not a prime factor of 1925 ice...

Basic Math
Q

2 The price of breakfast cereals rise the demand for milk will increases decreases Which...

Basic Math
Q

Suppose a line segment whoseendpoints are C(7,3) and D(11,-5) isreflected over y=-x. What is the...

Basic Math
Q

simple random sample of 45 CHS students is conducted The mean age of the sample...

Statistics
Q

Find the first derivative of f x 6x e cot x GLO

Calculus
Q

Decide if the following series converge or diverge SPECIFY the TEST you are using then...

Algebra
Q

LO.2, 5 Al is a medical doctor who conducts his practice as a sole proprietor....

Accounting
Q

On July 1st,201, the Youngsun Kim Corporation leased equipment to the Irish Lontoc Corporation....

Accounting
Q

SUPERVALU, one of the largest grocery retailers in the United States, is headquartered in Minneapolis....

Accounting
Q

Closing Entries After the accounts have been adjusted at September 30, the end of the...

Accounting