Headland Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ (National Association of Securities Dealers Quotes). Headland Corp. has issued 10,000 units. Each unit consists of a 12% subordinated debenture and 10 shares of $5 par common stock. The units were sold to outside investors for cash at $855 per unit. Prior to this sale the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable mark the debentures, and therefore the par value of the bonds is equal to the fair value. a) Prepare the journal entry to record Headland' transaction, under the following conditions: (Round answers to O decimal place, e.g. 38,487. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is n select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quotes on the common stock reflects fair value.

Headland Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ (National Association of Securities Dealers Quotes). Headland Corp. has issued 10,000 units. Each unit consists of a 12% subordinated debenture and 10 shares of $5 par common stock. The units were sold to outside investors for cash at $855 per unit. Prior to this sale the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable mark the debentures, and therefore the par value of the bonds is equal to the fair value. a) Prepare the journal entry to record Headland' transaction, under the following conditions: (Round answers to O decimal place, e.g. 38,487. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is n select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quotes on the common stock reflects fair value.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Coronado Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Coronado Corp. has issued 16,000 units. Each unit consists of a $1,104 par value, 12% subordinated debenture and 16 shares of $8 par common stock. The units were sold to outside investors for cash at $1,408 per unit. Prior to this sale, the 2-week ask price of common stock was $46 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Coronado's transaction, under the following conditions. (List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 38,487. Credit account titles are automatically indented when the 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.) 1. 2.…
Concord Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Concord Corp. has issued 20,500 units. Each unit consists of a $1,025 par, 12% subordinated debenture and 21 shares of $10 par common stock. The units were sold to outside investors for cash at $1,804 per unit. Prior to this sale, the 2-week ask price of common stock was $82 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Concord’s transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. 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.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quote on…
Swifty Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Swifty Corp. has issued 12,000 units. Each unit consists of a $600 par, 12% subordinated debenture and 12 shares of $6 par common stock. The units were sold to outside investors for cash at $1,056 per unit. Prior to this sale, the 2-week ask price of common stock was $48 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value.(a) Prepare the journal entry to record Swifty’s transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. 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.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quote on…
Wildhorse Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Wildhorse Corp. has issued 11,000 units. Each unit consists of a $ 550 par, 12% subordinated debenture and 11 shares of $ 6 par common stock. The units were sold to outside investors for cash at $ 968 per unit. Prior to this sale, the 2-week ask price of common stock was $ 44 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value.(a) Prepare the journal entry to record Wildhorse’ s transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. 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.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent…
Faith Evans Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Faith Evans Corp. has issued 10,000 units. Each unit consists of a $500 par, 12% subordinated debenture and 10 shares of $5 par common stock. The units were sold to outside investors for cash at $880 per unit. Prior to this sale, the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. Instructions a. Prepare the journal entry to record Evans’ transaction, under the following conditions. 1. Employing the incremental method. 2. Employing the proportional method, assuming the recent price quote on the common stock reflects fair value. b. Briefly explain which method is, in your opinion, the better method.
Concord Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Concord Corp. has issued 12,500 units. Each unit consists of a $ 625 par, 12% subordinated debenture and 13 shares of $ 6 par common stock. The units were sold to outside investors for cash at $ 1,100 per unit. Prior to this sale, the 2-week ask price of common stock was $ 50 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value.(a) Prepare the journal entry to record Concord’ s transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. 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.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent…
Riverbed Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Riverbed Corp. has issued 17,000 units. Each unit consists of a $850 par, 12% subordinated debenture and 17 shares of $9 par common stock. The units were sold to outside investors for cash at $1,496 per unit. Prior to this sale, the 2-week ask price of common stock was $68 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Riverbed's transaction, under the following conditions. (Round answers to 0 decimal places, e.g. $38,487. 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.) (1) Employing the incremental method. (2) Employing the proportional method, assuming the recent price quote on…
2. Sheffield Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Sheffield Corp. has issued 18,500 units. Each unit consists of a $1,140 par value, 12% subordinated debenture and 19 shares of $9 par common stock. The units were sold to outside investors for cash at $1,628 per unit. Prior to this sale, the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Sheffield's transaction, under the following conditions. (List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to O decimal places, e.g. 38,487. Credit account titles are automatically indented when the 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.) 1.…
Diversified Services, Inc., offers a variety of business services, including financial services through its escrow division. Diversified's fiscal year ends on December 31. The only securities held by Diversified at December 1 were 12 million common shares of Shelby Laminations, Inc., purchased in November for $50 million and classified as available-for-sale. Diversified entered into the following investment activities during the last month of 2013 and the first week of 2014: 2013 Dec. 1 Dec. 9 Dec.29 Dec.30 Dec.31 Purchased $30 million of 12% bonds of Vince-Gill Amusement Corporation and $24 million of 10% bonds of Eastern Waste Disposal Corporation, both at face value and both to be held until they mature. Interest on each bond issued is payable semiannually on November 30 and May 31. Sold on-half of the Shelby Laminations common shares for $26 million. Received cash dividends of $1.5 million from the Shelby Laminations common shares. Purchased UPS's common shares for $5.8 million as…
ICOT Industries issued 15 million of its $1 par common shares for $424 million on April 11. Legal, promotional, and accounting services necessary to effect the sale cost $2 million. Required: 1. Prepare the journal entry to record the issuance of the shares. 2. Explain how recording the share issue costs differs from the way debt issue costs are recorded.
Zeus Investments Inc. is a regional investment company that began operations on January 1, Year 1. The following transactions relate to trading securities acquired by Zeus Investments Inc., which has a fiscal year ending on December 31: Year 1 Feb. 14. Purchased 3,400 shares of Apollo Inc. as a trading security at $38 per share plus a brokerage commission of $680. Apr. 1. Purchased 1,600 shares of Ares Inc. as a trading security at $15 per share plus a brokerage commission of $320. June 1. Sold 800 shares of Apollo Inc. for $39 per share less an $100 brokerage commission. June 27. Received an annual dividend of $0.11 per share on Apollo stock. Dec. 31. The portfolio of trading securities was adjusted to fair values of $42 and $16 per share for Apollo Inc. and Ares Inc., respectively. Year 2 Mar. 14. Purchased 1,500 shares of Athena Inc. as a trading security at $44 per share plus a $225 brokerage commission. June 26. Received an annual dividend of $0.14 per share…
Zeus Investments Inc. is a regional investment company that began operations on January 1, Year 1. The following transactions relate to trading securities acquired by Zeus Investments Inc., which has a fiscal year ending on December 31: Year 1 Feb. 14. Purchased 1,800 shares of Apollo Inc. as a trading security at $43 per share plus a brokerage commission of $360. Apr. 1. Purchased 900 shares of Ares Inc. as a trading security at $17 per share plus a brokerage commission of $180. June 1. Sold 400 shares of Apollo Inc. for $44 per share less an $50 brokerage commission. June 27. Received an annual dividend of $0.13 per share on Apollo Inc. stock. Dec. 31. The portfolio of trading securities was adjusted to fair values of $47 and $18 per share for Apollo Inc. and Ares Inc., respectively. Year 2 Mar. 14. Purchased 800 shares of Athena Inc. as a trading security at $50 per share plus a $120 brokerage commission. June 26. Received an annual dividend of $0.16 per share…