Record bond and warrants issuance using proportional method

Reference no: EM131882904

Question: 1. On May 1, 2014, Friendly Company issued 2,300 $1,000 bonds at 97. Each bond was issued with one detachable stock warrant. Similar bonds without warrants sell in the market for about 94, and similar warrants have a $29 market value.

a. Using proportional method, record bond and warrants issuance

b. Same as a, but use the incremental method

c. Attempt a. and b. if bonds were issued at 107 and sell for 103 without the warrant

Reference no: EM131882904

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