Question

Blossom Corporation issued 1,200 $1,000 bonds at 103. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling separately at 97. The market price of the warrants without the bonds cannot be determined. Use the incremental 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 o for the amounts.) Credit account titlesirane, select Account Titles and Explanation Debit Credit

Answer 1

Account Titles and Explanation	Debit	Credit
Cash	1,236,000		(1,200 x $1,000 x 1.03)
Discount on Bonds Payable	36,000		(1,200 x $1,000) - (1,200 x $1,000 x 0.97)
Bonds Payable		1,200,000	(1,200 x $1,000)
Paid-in Capital - Stock Warrants		72,000	Balance