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Bonds with Detachable Warrants. On June 30, 2016, Cano Corporation issued $8 million of 4%...

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Accounting

Bonds with Detachable Warrants. On June 30, 2016, Cano Corporation issued $8 million of 4% bonds for $8,200,000. Each $1,000 bond was issued with 15 detachable stock warrants, each of which entitled the bondholder to purchase one share of Canos no-par common stock for $45. Immediately after the issuance of the bonds, the warrants were separately trading for $3 each. Prepare the journal entry to record the issuance of these bonds. For 2 points extra credit, calculate the effective interest rate on the bond portion of this sale, assuming the bonds mature in 10 years. (Calculator set on END)?

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