decides to refund the bonds by selling a new 6% bond issue to
mature in 5 years. Hurst begins to reacquire its 8% bonds in the
market and is able to purchase $500,000 worth at 101. The
remainder of the outstanding bonds is reacquired by exercising the
bonds' call feature. In the final analysis, how much was the gain or
loss experienced by Hurst in reacquiring its 8% bonds? (Assume the
firm used straight-line amortization.) Show calculations.
4. (TCO E) Parker Corporation has issued 2,000 shares of common
stock and 400 shares of preferred stock for a lump sum of $72,000
cash.
Instructions:
(a) Give the entry for the issuance, assuming the par value of the
common was $5 and the market value $30, and the par value of the
preferred was $40 and the market value $50. (Each valuation is on a
per-share basis and there are ready markets for each stock.)
(b) Give the entry for the issuance assuming the same facts as (a)
above except the preferred stock has no ready market value, and the
common stock has a market value of $25 per share.
5. (TCO F) Describe the journal entry for a stock dividend on
common stock (which has a par value)
6. (TCO A) At December 31, 2010, Kifer Company had 500,000
shares of common stock outstanding. On October 1, 2011, an
additional 100,000 shares of common stock were issued. In addition,