Pronghorn Corporation issued 1,800 $1,000 bonds at 103. Each bond was issued wit

Question

Pronghorn Corporation issued 1,800 $1,000 bonds at 103. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling in the market at 99, and the warrants had a market price of $33 Use the proportional method to record the issuance of the bonds and warrants. (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. Round intermediate calculations to 5 decimal places, e.g 1.24687 and final answers to 0 decimal places, e.g. 5,125.) Account Titles and Explanation Debit Credit

Explanation / Answer

Number * amount * price = Total percent Bonds 1,800 * 1,000 * 0.99 = 1,782,000.00 97% Warrants 1,800 * 33 =        59,400.00 3% Total fair market value 1,841,400.00 Allocation Bonds warrants issue price 1854000 1854000 Allocation% 97% 3% total 1798380 55620 Bonds face value 1800000 Allocated FMV 1798380 discount on bonds payable 1620 Journal Entry Account titles & Explanations Debit Credit Cash 1854000 discount on bonds payable 1620 Bonds payable 1800000 Paid in capital -Stock warrant 55620

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