On January 1,2020, Krona Incorporated issued a financial Instrument consisting of a $1,000,4% bond payable...
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Accounting
On January Krona Incorporated issued a financial Instrument consisting of a $ bond payable and shares of $ par common stock. The yield for bonds of similar risk is The stock recenty traded at $ per share.
a
Assuming the individual values of the components are known, which they are, record the issuance of the combined security at a price of $ using the proportional method.
b Assuming only the fair value of the bond is known because the stock is thinly traded, record the sale of the combined security at a price of $ using the incremental method.
c Why would you prefer to use the incremental method in a despite the fact that both security values are known? Which of the known values would you use?
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