On May 31, 2007, Core Company issued 1,000, 14%, 10-year $1,000bonds at 105. Each bond was issued with one detachable stockwarrant. Shortly after issuance, the bonds were selling at 102, butthe market value of the warrants cannot be determined.
Instructions:
(a) Prepare the entry to record the issuance ofthe bonds and warrants.
(b) Assume the same facts as part (a), exceptthat the warrants had a fair value of $8. Prepare the entry to record the issuance of the bonds and warrants.