Mgmt351 Week 3

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MGMT351 HW3 Name: YIXUAN DING ID:002392316 1. A (4000 warrants * $10)/ (4000 warrants*$10+1000*$1000*1.01) =4% The other 96% of total issue price of 1000*1000*1.04=998400 is allocated to the bonds Journal entry: Cash 1,040,000 Discount on Bond Payable 1,600 Bond Payable 1,000,000 Common Stock Warrants 41,600 B Cash amount=(1000*4)/2*20=40,000 Common stock warrants=(1000*4)/2*10=20,000 Common stock at par=2000*0.1=200 Journal entry: Cash 40,000 Common Stock warrants 20,000 Common Stock 200 Paid-in capital in excess of par 59800 C The other half was expired. (1000*4)/2=2000 warrants expired. 2000*10=20000 Journal entry: Common Stock warrants

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