The stockholders’ equity section of Sweet Inc

The stockholders’ equity section of Sweet Inc. at the beginning of the current year appears below. Common stock, $10 par value, authorized 999,000 shares, 310,000 shares issued and outstanding $3,100,000 Paid-in capital in excess of par—common stock 565,000 Retained earnings 533,000 During the current year, the following transactions occurred. 1. The company issued to the stockholders 95,000 rights. Ten rights are needed to buy one share of stock at $33. The rights were void after 30 days. The market price of the stock at this time was $35 per share. 2. The company sold to the public a $218,000, 10% bond issue at 104. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common stock at $31 per share. Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $8. 3. All but 4,750 of the rights issued in (1) were exercised in 30 days. 4. At the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good standing. 5. During the current year, the company granted stock options for 9,500 shares of common stock to company executives. The company, using a fair value option-pricing model, determines that each option is worth $10. The option price is $31. The options were to expire at year-end and were considered compensation for the current year. 6. All but 950 shares related to the stock-option plan were exercised by year-end. The expiration resulted because one of the executives failed to fulfill an obligation related to the employment contract. Transcribed Image Text: Prepare general journal entries for the current year to record the transactions listed above. (Credīt account titles are
automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles
and enter O for the amounts. Round intermediate calculations to 7 decimal places, eg. 12468756 and final answers to O decimal
places, eg 5,125)
No. Account TItles and Explanation
Debit
Credit
1.
No Entry
No Entry
2.
Cash
226720
Discount on Bonds Payable
Bonds Payable
Paid-in Capital-Stock Warrants
3.
Cash
Common Stock
Paid-in Capital in Excess of Par Common Stock
4.
Pald-in Capital-Stock Warrants
Cash
Common Stock
Paild-in Capital in Excess of Par-Common Stock
5.
Compensation Expense
Pald-in Capital-Stock Options
6. For options exercised:
Cash
Pald-in Capital-Stock Options
Common Stock
Paid-in Capital in Excess of Par-Common Stock
For options lapsed:
Pald-in Capital-Stock Options
Compensation Expense

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