How to allocate the issuance price


Response to the following problem:

Violet Corporation issues 1,200 shares of $150 par value preferred stock at a price of $200 per share. It attaches a warrant to each share of stock that allows the holder to purchase one share of $20 par common stock at $50 per share.

Given that the portion of the proceeds attributable to the preferred stock totals $230,303 and the portion attributable to the common stock warrants totals $9,697, what journal entry would Violet make to allocate the $240,000 ($200 1,200) issuance price?

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Accounting Basics: How to allocate the issuance price
Reference No:- TGS02104290

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