Question

x Wiley Plus future entry - Black X leyplus.com/edugen/student/mainfr.uni Wiley PLUS X 5 Consumer Access - Individual X + WileyPLUS: MYWYPLUS I Hele 1 Contact Us I Les Kleso, Intermediate Accounting, 16e Intermediate Accounting, 16e (ACC 334-335-444) Assignment Gradebook ORION Downloadable eTextbook ant CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT Brief Exercise 16-4 Sheridan Corporation issued 2,000 $1,000 bonds at 101. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling in the market at 98, and the warrants had a market price of $43. Use the proportional method to record the issuance of the bonds and warrants. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select No Entry for the account titles and enter for the amounts. Round intermediate calculations to decimal places, e.g. 1.24687 and final answers to o decimal places, e.g. 5,125.) Account Titles and Explanation Credit Debit 2,000,000 Discount on Bonds Payable Bonds Payable Pald-in Capital-Stock Warrants VIDEO SIMILAR EXERCISE Question Attempts: 0 of 10 used SAVE FOR LATER SUBMIT ANSWER Policx 2000-2020 on Wiley Sons, Inc. All Rights Reserved. A Division of John Wiley. Sans Inc

Answer 1

In the books of Sheridan Corporation : Credit Particulars Cash (2,000 x 1,000 x 101%) Discounts on Bonds Bonds Payable Paid -in Capital : Stock Warrants Debit $2,020,000 $64,907 $2,000,000 $84,907 Working Note: Bond issue proceeds proportionately allocated to bonds: $ 2,020,000 x 980 / (980 +43) = $ 1,935,093. Discount on Bonds Payable + $ 2,000,000 - $ 1,935,093 = $ 64,907