Problem:
Hoffman Corporation issued $50 million of 7%, 20-year bonds at 104. Each of the 50,000 bonds was issued with 10 detachable stock warrants, each of which entitled the bondholder to purchase, for $20, one share of $1 par common stock. At the time of sale, the market value of the common stock was $25 per share and the market value of each warrant was $8.
Required:
Question: Prepare the journal entry to record the issuance of the bonds.
Note: Be sure to show how you arrived at your answer.