Journal entry for issuance of bonds and warrants

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At the start of the year Huish Company issued $18,000,000 of 12% bonds along with warrants to buy 1,200,000 shares of its $10 par value common stock at $18 per share. The bond matures over the next 10 years, starting one year from date of issuance, with annual maturities of $1,800,000. At the time, Huish had 9,600,000 shares of common stock outstanding, and the market price was 423 per share. The company received $20,040,000 for the bonds and the warrants. For Huish Company, 12% was a relatively low borrowing rate. If offered alone, at this time, the bonds would have been issued at a 22% discount. Prepare the journal entry for the issuance of the bonds and warrants for the cash considered received.

Reference no: EM13147024

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