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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
E14-16 Detachable Stock Warrants Conroe Corporation sold $500,000 of 13% bonds at 107. Each $1,000 bond carried 20 warrants, and each warrant allowed the holder to acquire one share of $10 par value common stock for $20 per share. Subsequent to the issuance of the securities, the bonds were quoted at 102 ex rights, and the warrants were quoted at $4 each.
Required
1.     Determine the value to be assigned to the bonds and the warrants, and prepare the journal entry to record the issuance of the convertible bonds.
2.     Assume that 4,000 warrants are subsequently exercised. Prepare the journal entry for the issuance of the common stock.
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