Question

In: Accounting

Faith Evans Corporation is a regional company which is an SEC registrant. The corporation’s securities are...

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 10,120 units. Each unit consists of a $506 par, 12% subordinated debenture and 10 shares of $5 par common stock. The investment banker has retained 405 units as the underwriting fee. The other 9,715 units were sold to outside investors for cash at $891 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 Evans’ 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 the common stock reflects fair value.

Solutions

Expert Solution

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Exercise 15-4 Faith Evans Corporation is a regional company which is an SEC registrant. The corporation’s...
Exercise 15-4 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 11,150 units. Each unit consists of a $558 par, 12% subordinated debenture and 11 shares of $6 par common stock. The investment banker has retained 446 units as the underwriting fee. The other 10,704 units were sold to outside investors for cash at $981 per unit. Prior to this sale, the 2-week ask...
Wildhorse Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly...
Wildhorse Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Wildhorse Corp. has issued 13,000 units. Each unit consists of a $650 par, 12% subordinated debenture and 13 shares of $7 par common stock. The units were sold to outside investors for cash at $1,144 per unit. Prior to this sale, the 2-week ask price of common stock was $52 per share. Twelve percent is a reasonable market yield for the...
Flounder Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly...
Flounder Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Flounder 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...
Exercise 15-4 Concord Corporation is a regional company which is an SEC registrant. The corporation’s securities...
Exercise 15-4 Concord Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Concord Corp. has issued 22,500 units. Each unit consists of a $1,125 par, 12% subordinated debenture and 23 shares of $11 par common stock. The units were sold to outside investors for cash at $1,980 per unit. Prior to this sale, the 2-week ask price of common stock was $90 per share. Twelve percent is a reasonable market yield...
Nailed It! Construction (Nailed It! or the “Company”), an SEC registrant, is a construction company that...
Nailed It! Construction (Nailed It! or the “Company”), an SEC registrant, is a construction company that manufactures commercial and residential buildings. On March 1, 2018, the Company entered into an agreement with a customer, Village Apartments, to construct a residential apartment building for a fixed price of $1.5 million. The Company estimates that it will incur costs of $1 million to complete construction of the apartment building. The apartment building will only transfer to Village Apartments once the construction of...
Nailed It! Construction (Nailed It! or the “Company”), an SEC registrant, is a construction company that...
Nailed It! Construction (Nailed It! or the “Company”), an SEC registrant, is a construction company that manufactures commercial and residential buildings. On March 1, 20X1, the Company entered into an agreement with a customer, Village Apartments, to construct a residential apartment building for a fixed price of $1.5 million. The Company estimates that it will incur costs of $1 million to complete construction of the apartment building. The apartment building will only transfer to Village Apartments once the construction of...
Nailed It! Construction (Nailed It! or the “Company”), an SEC registrant, is a construction company that...
Nailed It! Construction (Nailed It! or the “Company”), an SEC registrant, is a construction company that manufactures commercial and residential buildings. On March 1, 20X1, the Company entered into an agreement with a customer, Village Apartments, to construct a residential apartment building for a fixed price of $1.5 million. The Company estimates that it will incur costs of $1 million to complete construction of the apartment building. The apartment building will only transfer to Village Apartments once the construction of...
Nailed It! Construction (Nailed It! or the “Company”), an SEC registrant, is a construction company that...
Nailed It! Construction (Nailed It! or the “Company”), an SEC registrant, is a construction company that manufactures commercial and residential buildings. On March 1, 20X1, the Company entered into an agreement with a customer, Village Apartments, to construct a residential apartment building for a fixed price of $1.5 million. The Company estimates that it will incur costs of $1 million to complete construction of the apartment building. The apartment building will only transfer to Village Apartments once the construction of...
Nailed It! Construction (Nailed It! or the “Company”), an SEC registrant, is a construction company that...
Nailed It! Construction (Nailed It! or the “Company”), an SEC registrant, is a construction company that manufactures commercial and residential buildings. On March 1, 20X1, the Company entered into an agreement with a customer, Village Apartments, to construct a residential apartment building for a fixed price of $1.5 million. The Company estimates that it will incur costs of $1 million to complete construction of the apartment building. The apartment building will only transfer to Village Apartments once the construction of...
ABC Construction (ABC or the “Company”), an SEC registrant, is a construction company that manufactures commercial...
ABC Construction (ABC or the “Company”), an SEC registrant, is a construction company that manufactures commercial and residential buildings. On March 1, 2018, the Company entered into an agreement with a customer, Village Apartments, to construct a residential apartment building for a fixed price of $1.5 million. The Company estimates that it will incur costs of $1 million to complete construction of the apartment building. The apartment building will only transfer to Village Apartments once the construction of the entire...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT