Meman parMarigold Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ.Marigold Corp. has issued 12,000 units. Each unit consists of a $660 par value, 12% subordinated debenture and 10 shares of $6common 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 commonstock was $44 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds isequal to the fair value.(a) Prepare the journal entry to record Marigold'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 indentedwhen 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.Employing the incremental method.2.Employing the proportional method, assuming the recent price quote on the common stock reflects fair value.No. Account Titles and Explanation1.2.DebitCredit

Journal Entries for Marigold Corporation1. Incremental Method:This method values the debenture and…

Answered: par Marigold Corporation is a regional…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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