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Prepare the entry if the warrants were nondetachable

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Sweet Inc. has decided to raise additional capital by issuing $162,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $136,850, and the value of the warrants in the market is $24,150. The bonds sold in the market at issuance for $145,500.

Question (a) What entry should be made at the time of the issuance of the bonds and warrants?

Question (b) Prepare the entry if the warrants were nondetachable

Reference no: EM132464974

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