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Question - Issuance of Bonds with Detachable Warrants

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Question - Issuance of Bonds with Detachable Warrants

On December 1, 2020, Giles Company sold 10,000 of its 10%, 15-year, $1,000 face value, nonconvertible bonds with detachable stock warrants at 102. Each bond carried three detachable warrants. Each warrant was for one share of common stock at a specified option price of $27 per share. Shortly after issuance, the warrants were quoted on the market for $2.50 each. No market value can be determined for the Giles Company bonds. Interest is payable on December 1 and June 1. Prepare the journal entry to record the issuance of bonds.

Reference no: EM132648665

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