Pronghorn Corporation issued 5,400, five year, 3% bonds at 104 on January 1, 2020. Interest spaid annually. Each $1,000 bond carried one detachable warrant allowing the holder to purchase 100 common shares in Pronghorn at $10 per share, the price at which Pronghorn shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 6%. On June 30, 2020, 1,080 of the bond holders exercised the options to buy the shares. Prepare the journal entries to record these events. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. Credit account titles are automatically indented when the amount entered. Do not indent manually.)

Pronghorn Corporation issued 5,400, five year, 3% bonds at 104 on January 1, 2020. Interest spaid annually. Each $1,000 bond carried one detachable warrant allowing the holder to purchase 100 common shares in Pronghorn at $10 per share, the price at which Pronghorn shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 6%. On June 30, 2020, 1,080 of the bond holders exercised the options to buy the shares. Prepare the journal entries to record these events. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. Credit account titles are automatically indented when the amount entered. Do not indent manually.)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6PA: Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

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