Question

E16-8B (Issuance of Bonds with DetachableWarrants) On December 1, 2014, Universal Coat Company sold10,000 of its 10%, 15-year, $1,000 face value, nonconvertible bondswith detachable stock warrants at 102. Each bond carried threedetachable warrants. Each warrant was for one share of common stockat a specified option price of $27 per share. Shortly afterissuance, the warrants were quoted on the market for $2.50 each. Nomarket value can be determined for the Universal Coat Companybonds. Interest is payable on December 1 and June 1. Bond issuecosts of $65,000 were incurred.

Instructions

Prepare in general journal format the entry to record theissuance of the bonds.