Solution:
Journal entries to record Reverded's transaction.
No | Account titles and explanation | Debit($) | Credit($) |
1 | Cash A/c Dr (16,000 * 1,408) | 22,528,000 | |
To Bonds payable A/c (16,000 * 800) | 12,800,000 | ||
To Common stock A/c (16,000 * 16 * 8) | 2,048,000 | ||
To Paid in capital excess of par- common stock A/c | 7,680,000 | ||
2 | Cash A/c Dr | 22,528,000 | |
Bonds discount A/c Dr [(16,000*800) - 9,880,780.8] | 2,919,219 | ||
To Bonds payable A/c | 12,800,000 | ||
To Common stock A/c | 2,048,000 | ||
To Paid in capital excess of par- common stock A/c (12,647,219 - 2,048,000) | 10,599,219 | ||
Working notes:
Debentures = (16,000 * 1,408) * 800 / (800 + 16 * 64)
= 22,528,000 * 800 / 1,824
= 22,528,000 * 0.4386
= 9,880,780.8
Common shares = (16,000 * 1,408) * (1,024 / 1,824)
= 22,528,000 * 0.5614
= 12,647,219
Exercise 15-4 Riverbed Corporation is a regional company which is an SEC registrant. The corporation's securities...
Exercise 15-04 Riverbed Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Riverbed Corp. has issued 13,500 units. Each unit consists of a $675 par, 12% subordinated debenture and 14 shares of $7 par common stock. The units were sold to outside investors for cash at $1,188 per unit. Prior to this sale, the 2-week ask price of common stock was $54 per share. Twelve percent is a reasonable market yield...
Exercise 15-4 Indigo Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDA Indigo Corp. has issued 22,000 units. Each unit consists of a $1,100 par, 12% subordinated debenture and 22 shares of $11 par common stock. The units were sold to outside investors for cash at $1,936 per unit. Prior to this sale, the 2-week ask price of common stock was $88 per share. Twelve percent is a reasonable market yield...
Skysong Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Skysong Corp. has Issued 20,500 units. Each unit consists of a $1,025 par, 12% subordinated debenture and 21 shares of $10 par common stock. The units were sold to outside investors for cash at $1,804 per unit. Prior to this sale, the 2-week ask price of common stock was $82 per share. Twelve percent is a reasonable market yield for the...
Flounder Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Flounder Corp. has issued 15,500 units. Each unit consists of a $775 par, 12% subordinated debenture and 16 shares of $8 par common stock. The units were sold to outside investors for cash at $1,364 per unit. Prior to this sale, the 2-week ask price of common stock was $62 per share. Twelve percent is a reasonable market yield for the...
Exercise 15-4 Flint Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Flint Corp. has issued 18,500 units. Each unit consists of a $925 par, 12% subordinated debenture and 19 shares of $9 par common stock. The units were sold to outside investors for cash at $1,628 per unit. Prior to this sale, the 2-week ask price of common stock was $74 per share. Twelve percent is a reasonable market yield...
Blossom Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Blossom Corp. has issued 19,000 units. Each unit consists of a $950 par, 12% subordinated debenture and 19 shares of $10 par common stock. The units were sold to outside investors for cash at $1,672 per unit. Prior to this sale, the 2-week ask price of common stock was $76 per share. Twelve percent is a reasonable market yield for the...
Cullumber Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Cullumber Corp. has issued 20,000 units. Each unit consists of a $1,000 par, 12% subordinated debenture and 20 shares of $10 par common stock. The units were sold to outside investors for cash at $1,760 per unit. Prior to this sale, the 2-week ask price of common stock was $80 per share. Twelve percent is a reasonable market yield for the...
Tamarisk Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Tamarisk Corp has issued 22,500 units. Each unit consists of a $1,125 par, 12% subordinated debenture and 23 shares of $11 par common stock. The units were sold to outside investors for cash at $1,980 per unit. Prior to this sale, the 2-week ask price of common stock was $90 per share. Twelve percent is a reasonable market yield for the...
Grouper Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Grouper Corp. has issued 20,000 units. Each unit consists of a $1,000 par, 12% subordinated debenture and 20 shares of $10 par common stock. The units were sold to outside investors for cash at $1,760 per unit. Prior to this sale, the 2-week ask price of common stock was $80 per share. Twelve percent is a reasonable market yield for the...
Splish Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Splish Corp. has issued 16,500 units. Each unit consists of a $825 par, 12% subordinated debenture and 17 shares of $8 par common stock. The units were sold to outside investors for cash at $1,452 per unit. Prior to this sale, the 2-week ask price of common stock was $66 per share. Twelve percent is a reasonable market yield for the...