Part 2: Issuance of Securities The following announcement appeared in the May 15
ID: 2555298 • Letter: P
Question
Part 2: Issuance of Securities
The following announcement appeared in the May 15, 2017, issue of the Wall Avenue Financial Journal:
_________________________________________________________________________
This announcement is not an offer of securities for sale or an offer to buy securities.
New Issue, May 15, 2017 $950,000,00
CRUDE OIL& GAS, INC.
6.25% Debentures Due July 1, 2032
Price 103.35%
Plus accrued interest if any from the date of issuance
Copies of the prospectus and the related prospectus supplement may be obtained from such
of the undersigned as may legally offer these securities under applicable securities laws.
Kermit Jeffers & Co. Inc. / Banks Bros. & Co. William Stork & Co.
Address the following:
Describe the entry to record the sale of a security and its impact on future interest expense.
Explanation / Answer
PART 1 Date Particulars Debit Credit $ $ May-15 Bank A/c Dr. 98930788 To Debenture Application A/c 98930788 (Being Application money Received) May-15 Debenture Application A/c 98930788 To 6.25% Debentures 95000000 To Securities Premium 3182500 To Interest Due A/c (See Note) 748288 (Being Debentures issued) Working Note: 1 Interest due 95000000*6.25/100*46/365 748288 2 Amount Received by the Company Debentures= 95000000 Security Premium = 95000000*3.35/100= 3182500 interest due = 748288 total 98930788 PART 2 Impact on Future Interest Interest expense will be $5937500 every year (95000000*6.25/100)
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