Please avoid solutions image based thankx On May 1, 2025, Metlock Company issued 2,100 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant.Shortly after issuance, the bonds were selling at 97, but the fair value of the warrants cannot be determined.a. Prepare the entry to record the issuance of the bonds and warrants. (List debit entry before credit entry. Credit account titles areautomatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles andenter o for the amounts.)Account Titles and ExplanationCashDiscount on Bonds PayableBonds PayablePaid-in Capital-Stock WarrantsDebit2100000CreditIb. Assume the same facts as part (a), except that the warrants had a fair value of $31. Prepare the entry to record the issuance of thebonds and warrants. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Donot indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Do not round intermediatecalculations, Round answers to O decimal places, e.g. 5,125.)

The bonds are generally issued by the government or corporation to raise money. The bonds are…

On May 1, 2025, Metlock Company issued 2,100 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Shortly after issuance, the bonds were selling at 97, but the fair value of the warrants cannot be determined.

On May 1, 2025, Metlock Company issued 2,100 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Shortly after issuance, the bonds were selling at 97, but the fair value of the warrants cannot be determined.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 5PA: Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July...

See similar textbooks

Related questions

Q: Woodbury Hospital provided the following data for its three service departments and three operating…

A: Under the step down method, cost of one service department is allocated to all departments and then…

Q: Exercise 5.1 (Static) Accounting Terminology (LO5-1, LO5-2, LO5-3, LO5-4, LO5-5, LO5-6 LO5-7) Listed…

A: Accounting terminology refers to the specialized language and terms used in the field of accounting…

Q: On January 1, 2025, the stockholders' equity section of Henry Corporation's balance sheet reported…

A: The stockholders' equity includes the issued capital and retained earnings of the business. The…

Q: Prepare journal entries in the accounting records of both the home office and the Exeter Branch of…

A: journal entries:-Journal entries are the records of business transactions.In the process of making…

Q: R. Burke Trial Balance as at 31 December 2019 Gross profit Accumulated depreciation on office…

A: Financial statements are set of documents that tell about the company’s financial performance over a…

Q: [The following information applies to the questions disp The following year-end information is taken…

A: The income statement is prepared to record the revenue and expenses for the current period. The cost…

Q: Sales revenue for Booker Company for 2023 amounted to $800,000. The products sold carry a six-month…

A: Warranty Expenses:Warranty expenses refer to those repair or replacement expenses that are either…

Q: activity level of $45,000 direct labor dollars. At the beginning of the year, the inventory balances…

A: To close any balance in the Manufacturing Overhead account to Cost of Goods Sold, the appllied…

Q: Required information In October, Nicole eliminated all existing inventory of cosmetic items. The…

A: FIFO Method :— It is one of the methods of inventory valuation in which it is assumed that old…

Q: Jerry contributed $8,000 for a 25% interest in a bookstore. He also contributed a cash register,…

A: A partnership is a contract between two or more persons to form a business and share profits and…

Q: Data concerning a recent period's activity in the Prep Department, the first processing department…

A: Material and conversion costs are the costs involved in the production process wherein the…

Q: The following transactions of Berain Manufacturers, that uses the perpetual inventory system, took…

A: FIFO Method is an inventory valuation method, Under this method company uses inventory in the…

Q: A credit manager considering whether to grant trade credit to a new customer is most likely to place…

A: Lets understand the basics.Profitability ratio shows how much profit is earned in compared to sales…

Q: 16. Carla exercises incentive stock options (ISOs) for 100 shares of stock at the option price of…

A: An ISO is a sort of employee stock option that gives various tax benefits and incentives to…

Q: Crane Corporation incurred the following costs while manufacturing its product: Materials used in…

A: Cost of goods manufactured means the amount of cost incurred by the entity on the production of the…

Q: Monty Company exchanged equipment used in its manufacturing operations plus $4,380 in cash for…

A: Journal Entry is the primary step in recording the transactions in the books of accounts.The…

Q: The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August,…

A: A department's production and cost activities for a reporting period is compiled in the production…

Q: Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts…

A: Standard costing is the process of replacing an actual cost in the accounting records with an…

Q: In the Assembly Department of Hannon Company, budgeted and actual manufacturing overhead costs for…

A: Lets understand the basics.Responsibility report: The outcome of responsibility accounting is called…

Q: please that also included in the submission?

A: Overhead Applied $ 5,12,500 Overhead Incurred Indirect Labour $ 1,50,000 Other…

Q: How do accounting standards and practices vary when accounting for intangible assets, such as…

A: In the realm of accounting, assets are broadly categorized into tangible and intangible assets.…

Q: Clemson Corp. stock Colorado Co. stock Buffaloes Co. stock Total of portfolio Previous fair value…

A: Investment is described as the amount which is invested or expended to generate income or profits…

Q: H 2345 3 Data 4 Beginning work in process inventory: Units in process A Chapter 4: Applying Excel 6…

A: " Since you have posted a question with multiple sub parts, we will provide the solution only to the…

Q: On July 1 of the current calendar year, Olive Co. paid $8,900 cash for management services to be…

A: The journal entries are prepared to record the transactions on regular basis. The adjustment entries…

Q: Will different system access levels for different users be incorporated?

A: The controls especially the internal control over the company within the each department is very…

Q: Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the…

A: The journal entries are prepared to record the transactions on regular basis. The overhead is…

Q: The financial information below was taken from the annual financial statements of Oriole Videos:…

A: The inventory turnover ratio displays the number of times the inventory was sold during the year. A…

Q: Morrison Company uses job-order costing to assign manufacturing costs to jobs. Its balance sheet on…

A: As per dual concept of accounting, every transaction has dual impact on the books of accounts.Assets…

Q: Darwin Company reports the following information: Sales Direct materials used Depreciation on…

A: Product cost is the cost incurred by the entity on the making of the goods. It include all the costs…

Q: • Gross profit margin: The • Net profit margin: The per from revenue Coverage ratio: The comp .…

A: Ratio analysis is a powerful tool used by businesses, investors, and financial analysts to evaluate…

Q: How much gross margin per unit will Pharoah-T generate if it fixes and sells these reworked shirts?…

A: · Ratio analysis used to identify the business performance of the company.· It is used to measure…

Q: Nash's Trading Post, LLC uses the allowance method for estimating uncollectible accounts. Prepare…

A: The journal entries are prepared to record the transactions on regular basis. The allowance for…

Q: Assume that each year a company normally produces and sells 80,000 units of its only product for $40…

A: Variable costs are costs that vary with the change in the level of output whereas fixed costs are…

Q: anya and Nancy each own a 20% interest in Partnership TNT. Both are calendar-year taxpayers.…

A: In the United States, the Internal Revenue Service (IRS) governs the tax regulations for individuals…

Q: 4. Prepare an income statement for the year and a balance sheet as of December 31. Hint: Retained…

A: Factory overhead It is the costs incurred during the manufacturing process and it is not including…

Q: Each of the four independent situations below describes a sales-type lease in which annual lease…

A: A lease is a contract that outlines the terms under which one party agrees to rent a property – in…

Q: The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two…

A: Plantwide Overhead Method:Allocates overhead costs to all products or departments based on a single…

Q: Required Information [The following information applies to the questions displayed below.] Griffin…

A: The fundamental characteristics of the double-entry system of accounting are summed up by the…

Q: Jerry contributed $8,000 for a 25% interest in a bookstore. He also contributed a cash register,…

A: In a partnership, the "basis" refers to the amount of money that a partner has invested in the…

Q: Required Information [The following information applies to the questions displayed below.] Clopack…

A: Conversion costs are the costs incurred to convert raw materials into finished goods. It includes…

Q: your answers to 2 decimal places, e.g., S 10 8 15 S Interest Rate 14 % 8% 13 % Future Value

A: Future Value is an value at a future date based on assumed rate of growth .It is caluclated as…

Q: On January 1, 2018, Rapid Airlines issued $280 million of its 6% bonds for $257 million. The bonds…

A: The journal entries are used to record business events like sale purchases and all other…

Q: A: On January 1st, 2022, Vehicle Inc. bought 5% of the outstanding stock of Bicycle Inc. for…

A: The method of recording of investment is dependent upon the fact which is the controlling interest…

Q: Cost Cost of good sold Advertising expense Sales commissions Shipping expense Administrative…

A: The income statement is one of the important financial statements of the business. The net income is…

Q: 2 3 4 5 (a) Innovation Corp receives $40,000 for providing architectural services. 1. Identify and…

A: The Accounting Equation is calculated using the following equation -Assets = Liabilities +…

Q: Riley Company began operations on August 1, 2026 and entered into the following transactions du ring…

A: As per dual concept of accounting, every transaction has dual impact on the books of accounts.A…

Q: What is the interest expense ratio for ACME bank?

A: An interest expense ratio is the ratio which is used by the banks or any businesses through which…

Q: General Motors of Canada Limited guarantees automobiles against defects for five years or 160,000…

A: Journal entry : Method of recording financial transactions in the book of original entry by debiting…

Q: The following balance sheet for the Los Gatos Corporation was prepared by a recently hired…

A: Balance sheet is a financial statement which summarises the firm's assets, liabilities and equities…

Q: Northeastern Insurance Company is considering opening an office in the U.S. The two cities under…

A: To determine the best location for Northeastern Insurance Company to open the office, we can…

Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Please avoid solutions image based thankx

On May 1, 2025, Metlock Company issued 2,100 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant.
Shortly after issuance, the bonds were selling at 97, but the fair value of the warrants cannot be determined.
a. Prepare the entry to record the issuance of the bonds and warrants. (List debit entry before credit entry. 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 o for the amounts.)
Account Titles and Explanation
Cash
Discount on Bonds Payable
Bonds Payable
Paid-in Capital-Stock Warrants
Debit
2100000
Credit
I
b. Assume the same facts as part (a), except that the warrants had a fair value of $31. Prepare the entry to record the issuance of the
bonds and warrants. (List all debit entries before credit entries. 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 O for the amounts. Do not round intermediate
calculations, Round answers to O decimal places, e.g. 5,125.)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction :

VIEW

Step 2: Working Note -

VIEW

Step 3: Working Note -

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?
On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The bonds had a stated rate of 6% and paid interest semiannually. What is the journal entry to record the issuance of the bonds?
Naval Inc. issued $200,000 face value bonds at a discount and received $190,000. At the end of 2018, the balance in the Discount on Bonds Payable account is $5,000. This years balance sheet will show a net liability of ________. A. $200,000 B. $180,000 C. $195,000 D. $205,000
On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018, and received $540,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of premium
On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The bonds had a stated rate of 6% and paid interest semi-annually. What is the journal entry to record the first payment to the bondholders?
Bats Corporation issued 800,000 of 12% face value bonds for 851,705.70. The bonds were dated and issued on April 1, 2019, are due March 31, 2023, and pay interest semiannually on September 30 and March 31. Bats sold the bonds to yield 10%. Required: 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. 3. Prepare any adjusting entries for the end of the fiscal year, December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. Assume the company retires the bonds on June 30, 2020, at 103 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight-line method of amortization b. effective interest method of amortization
Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $540,000. Interest is payable annually. The premium is amortized using the straightline method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premium
Willoughby Inc. issued 100 bonds with a face value of $1,000 and a stated rate of 4% and received $105,000. What is the journal entry to record the sale of the bonds?
Dixon Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $480,000. Interest is payable annually. The discount is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of discount D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of discount