Sheffield Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Sheffield Corp. has issued 18,500 units. Each unit consists of a $1,140 par value, 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 $40 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Sheffield's transaction, under the following conditions. (List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to O decimal places, e.g. 38,487. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) 1. Employing the incremental method. 2. Employing the proportional method, assuming the recent price quote on the common stock reflects fair value. No. Account Titles and Explanation 1. 2. Debit Credit

Sheffield Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Sheffield Corp. has issued 18,500 units. Each unit consists of a $1,140 par value, 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 $40 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Sheffield's transaction, under the following conditions. (List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to O decimal places, e.g. 38,487. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) 1. Employing the incremental method. 2. Employing the proportional method, assuming the recent price quote on the common stock reflects fair value. No. Account Titles and Explanation 1. 2. Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Concord Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Concord 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 debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Concord’s transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quote on…
Coronado Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Coronado Corp. has issued 16,000 units. Each unit consists of a $1,104 par value, 12% subordinated debenture and 16 shares of $8 par common stock. The units were sold to outside investors for cash at $1,408 per unit. Prior to this sale, the 2-week ask price of common stock was $46 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Coronado's transaction, under the following conditions. (List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 38,487. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) 1. 2.…
Concord Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Concord Corp. has issued 12,500 units. Each unit consists of a $ 625 par, 12% subordinated debenture and 13 shares of $ 6 par common stock. The units were sold to outside investors for cash at $ 1,100 per unit. Prior to this sale, the 2-week ask price of common stock was $ 50 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value.(a) Prepare the journal entry to record Concord’ s transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent…
Ivanhoe Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Ivanhoe Corp. has issued 17,500 units. Each unit consists of a $875 par, 12% subordinated debenture and 18 shares of $9 par common stock. The units were sold to outside investors for cash at $1,540 per unit. Prior to this sale, the 2-week ask price of common stock was $70 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value.(a) Prepare the journal entry to record Ivanhoe’s transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quote…
Swifty Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Swifty Corp. has issued 12,000 units. Each unit consists of a $600 par, 12% subordinated debenture and 12 shares of $6 par common stock. The units were sold to outside investors for cash at $1,056 per unit. Prior to this sale, the 2-week ask price of common stock was $48 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value.(a) Prepare the journal entry to record Swifty’s transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quote on…
Riverbed Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Riverbed Corp. has issued 17,000 units. Each unit consists of a $850 par, 12% subordinated debenture and 17 shares of $9 par common stock. The units were sold to outside investors for cash at $1,496 per unit. Prior to this sale, the 2-week ask price of common stock was $68 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Riverbed's transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quote on…
Headland Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ (National Association of Securities Dealers Quotes). Headland Corp. has issued 10,000 units. Each unit consists of a $500 par, 12% subordinated debenture and 10 shares of $5 par common stock. The units were sold to outside investors for cash at $855 per unit. Prior to this sale the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Headland' transaction, under the following conditions: (Round answers to O decimal place, e.g. 38,487. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) (1) Employing the…
Wildhorse Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Wildhorse Corp. has issued 11,000 units. Each unit consists of a $ 550 par, 12% subordinated debenture and 11 shares of $ 6 par common stock. The units were sold to outside investors for cash at $ 968 per unit. Prior to this sale, the 2-week ask price of common stock was $ 44 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value.(a) Prepare the journal entry to record Wildhorse’ s transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent…
Faith Evans Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Faith Evans Corp. has issued 10,000 units. Each unit consists of a $500 par, 12% subordinated debenture and 10 shares of $5 par common stock. The units were sold to outside investors for cash at $880 per unit. Prior to this sale, the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. Instructions a. Prepare the journal entry to record Evans’ transaction, under the following conditions. 1. Employing the incremental method. 2. Employing the proportional method, assuming the recent price quote on the common stock reflects fair value. b. Briefly explain which method is, in your opinion, the better method.
(Lump-Sum Sale of Stock with Bonds) Faith Evans Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Faith Evans Corp. has issued 10,000 units. Each unit consists of a $500 par, 12% subordinated debenture and 10 shares of $5 par common stock. The units were sold to outside investors for cash at $880 per unit. Prior to this sale, the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Evans’ transaction, under the following conditions. (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quote on the common stock reflects fair value. (b) Briefly explain which method is, in your opinion, the better method.
(Lump-Sum Sale of Stock with Bonds) Faith Evans Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Faith Evans Corp. has issued 10,000 units. Each unit consists of a $500 par, 12% subordinated debenture and 10 shares of $5 par common stock. The units were sold to outside investors for cash at $880 per unit. Prior to this sale, the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value.Instructions(a) Prepare the journal entry to record Evans’ transaction, under the following conditions.(1) Employing the incremental method.(2) Employing the proportional method, assuming the recent price quote on the common stock reflects fair value.(b) Briefly explain which method is, in your opinion, the better method.
ICOT Industries issued 15 million of its $1 par common shares for $424 million on April 11. Legal, promotional, and accounting services necessary to effect the sale cost $2 million. Required: 1. Prepare the journal entry to record the issuance of the shares. 2. Explain how recording the share issue costs differs from the way debt issue costs are recorded.