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the gomez company issues $5,000,000 of bonds with a coupon rate of 8%. to help the sale, detachable stock warrants are issued at the rate of ten warrants for each $1,000 bond sold. it is estimated that the value of the bonds without the warrants is $4,935,000 and the value of the warrants is $315,000. the bonds with the warrants sold at 101. the journal entry to record the sale of the bonds and the detachable stock warrants would include a

Sagot :

The entry for Gomez company is Debit: Cash 5,150,000

Credit: Bonds Payable 5,000,000

Credit: Premium on Bonds Payable 50,000

Credit: Stock Warrants Payable 315,000

A journal entry is the act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company's debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit.

There are various types of journal entries :

Opening entries.

Transfer entries

Adjusting entries

Compound entries

Reversing entries

To know more about journal entries here

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