On January 1, 2014, Cooper Corporation Issued $800,000 of 12

Essay

On January 1, 2014, Cooper Corporation issued $800,000 of 12.5% bonds due January 1, 2021, at 101. The bonds pay interest semiannually on June 30 and December 31. Each $1,000 bond carried 10 warrants which allowed the acquired to exchange 1 share of $10 par common stock for $50. Some time after the bonds were issued the bonds were quoted at 98 ex rights and each individual warrant was quoted at $5. Subsequently, on April 30, 2015, 2,000 rights were exercised.
Required:
1. Prepare the journal entry to record the bond issue.
2. Prepare the journal entries on April 30, 2015, to record the exchange of the warrants for common shares.