The stockholders' equity section of Sandhill Inc. at the beginning of the current year appears below. Common stock, $10 par value, authorized 1,038,000 shares, 327,000 shares issued and outstanding Paid-in capital in excess of par-common stock Retained earnings During the current year, the following transactions occurred. $3,270,000 657,000 624,000
The stockholders' equity section of Sandhill Inc. at the beginning of the current year appears below. Common stock, $10 par value, authorized 1,038,000 shares, 327,000 shares issued and outstanding Paid-in capital in excess of par-common stock Retained earnings During the current year, the following transactions occurred. $3,270,000 657,000 624,000
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:James A. Heintz, Robert W. Parry
Chapter20: Corporations: Organization And Capital Stock
Section: Chapter Questions
Problem 1MP: Stockholders equity accounts and other related accounts of Gonzales Company as of January 1, 20--,...
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![The stockholders' equity section of Sandhill Inc. at the beginning of the current year appears below.
Common stock, $10 par value, authorized 1,038,000 shares, 327,000 shares issued and outstanding
Paid-in capital in excess of par-common stock
Retained earnings
During the current year, the following transactions occurred.
1.
2.
3.
4.
5.
6.
(a)
1.
The company issued to the stockholders 100,000 rights. Ten rights are needed to buy one share of stock at $33. The rights
were void after 30 days. The market price of the stock at this time was $35 per share.
2.
No. Account Titles and Explanation
3.
4.
Prepare general journal entries for the current year to record the transactions listed above. (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.)
5.
The company sold to the public a $197,000, 10% bond issue at 104. The company also issued with each $100 bond one
detachable stock purchase warrant, which provided for the purchase of common stock at $31 per share. Shortly after
issuance, similar bonds without warrants were selling at 96 and the warrants at $8.
All but 5,000 of the rights issued in (1) were exercised in 30 days.
At the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good
standing.
$3,270,000
During the current year, the company granted stock options for 10,000 shares of common stock to company executives. The
company, using a fair value option-pricing model, determines that each option is worth $10. The option price is $31. The
options were to expire at year-end and were considered compensation for the current year.
657,000
624,000
All but 1,000 shares related to the stock-option plan were exercised by year-end. The expiration resulted because one of the
executives failed to fulfill an obligation related to the employment contract.
6. For options exercised:
For options lapsed:
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc9e3d82e-ae00-4f0e-b1fc-73966dfb30c4%2F6a57ad52-dbdf-44bb-b890-9fbebdfbf449%2Fixze3h_processed.png&w=3840&q=75)
Transcribed Image Text:The stockholders' equity section of Sandhill Inc. at the beginning of the current year appears below.
Common stock, $10 par value, authorized 1,038,000 shares, 327,000 shares issued and outstanding
Paid-in capital in excess of par-common stock
Retained earnings
During the current year, the following transactions occurred.
1.
2.
3.
4.
5.
6.
(a)
1.
The company issued to the stockholders 100,000 rights. Ten rights are needed to buy one share of stock at $33. The rights
were void after 30 days. The market price of the stock at this time was $35 per share.
2.
No. Account Titles and Explanation
3.
4.
Prepare general journal entries for the current year to record the transactions listed above. (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.)
5.
The company sold to the public a $197,000, 10% bond issue at 104. The company also issued with each $100 bond one
detachable stock purchase warrant, which provided for the purchase of common stock at $31 per share. Shortly after
issuance, similar bonds without warrants were selling at 96 and the warrants at $8.
All but 5,000 of the rights issued in (1) were exercised in 30 days.
At the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good
standing.
$3,270,000
During the current year, the company granted stock options for 10,000 shares of common stock to company executives. The
company, using a fair value option-pricing model, determines that each option is worth $10. The option price is $31. The
options were to expire at year-end and were considered compensation for the current year.
657,000
624,000
All but 1,000 shares related to the stock-option plan were exercised by year-end. The expiration resulted because one of the
executives failed to fulfill an obligation related to the employment contract.
6. For options exercised:
For options lapsed:
Debit
Credit
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