On September 1, 2020, Crane Corp. sold at 104 (plus accrued interest) 5,370 of its $1,000 face value, 10year, 8% nonconvertible bonds with detachable stock warrants. Each bond carried 2 detachable warrants; each warrant was for one common share at a specified option price of $12 per share. Shortly after issuance, the warrants were selling for $6 each. Assume that no fair value is available for the bonds. Interest is payable on December 1 and June 1. Crane Corp. prepares its financial statements in accordance with ASPE. Prepare in general journal format the entry to record the issuance of the bonds under both options available under ASPE. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Residual method: September 1, 2020 (To record the issuance of

the bonds) Allocation of zero to equity: (To record the issuance of the bonds) List of Accounts From the perspective of a creditor, what is the effect of

each option on Crane Corp.s debt to total assets ratio? Measuring the equity component at zero results in a Choose the answer from the menu in

accordance to the question statement debt to total assets ratio compared with the residual method

Prepare in general journal format the entry to record the issuance of the bonds under both options available under ASPE. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Residual method:
September 1, 2020
	(To record the issuance of the bonds)
Allocation of zero to equity:
	(To record the issuance of the bonds)