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Faith Evans Corporation is a regional company which is an SEC registrant. The corporations securities...

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Accounting

Faith Evans Corporation is a regional company which is an SEC registrant. The corporations securities are thinly traded on NASDAQ. Faith Evans Corp. has issued 18,000 units. Each unit consists of a $900 par, 12% subordinated debenture and 18 shares of $9 par common stock. The units were sold to outside investors for cash at $1584 per unit. Prior to this sale, the 2-week ask price of common stock was $72 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bond is equal to the fair value

(a) prepare the journal entry to record evans transaction,

  1. Employing the incremental method
  2. Employing the proportional method

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