Record the entries made at the date of issuance

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Problem - On March 1, 2020 Pepsi Co. issued $1,000,000 of 8% nonconvertible bonds at 104, which are due on February 28, 2040. In addition, each $1,000 bond was issued with 25 detachable stock warrants, each of which entitled the bondholder to purchase for $50 one share of Pepsi common stock, par value $25. The bonds without the warrants would normally sell at 95. On March 1, 2020, the fair value of Pepsi's common stock was $40 per share and the fair value of the warrants was $2.00.

Record the entries made at the date of issuance and the date of exercise, assuming all warrants are exercised on December 31, 2023.

Reference no: EM133025053

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