The Rand Company wants to raise additional equity capital.The company decides to issue 5,000 shares of $25 par preferred stock with detachable warrants.The package of the stock and warrants sells for $105.Each warrant enables the holder to purchase two shares of $10 par common stock at $30 per share.Immediately following the issuance of the stock,the stock warrants are selling at $14 each.The market value of the preferred stock without the warrants is $96.
(1)Prepare a journal entry for Rand Company to record the issuance of the preferred stock and the detachable warrants.
(2)Assuming that all the warrants are exercised,prepare a journal entry for Rand to record the exercise of the warrants.
(3)Assuming that only 70 percent of the warrants are exercised,prepare a journal entry for Rand to record the exercise and expiration of the warrants.

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The Answer of The Rand Company wants to raise additional equity capital.The company decides to issue 5,000 shares of $25 par preferred stock with detachable warrants.The package of the stock and warrants sells for $105.Each warrant enables the holder to purchase two shares of $10 par common stock at $30 per share.Immediately following the issuance of the stock,the stock warrants are selling at $14 each.The market value of the preferred stock without the warrants is $96.
(1)Prepare a journal entry for Rand Company to record the issuance of the preferred stock and the detachable warrants.
(2)Assuming that all the warrants are exercised,prepare a journal entry for Rand to record the exercise of the warrants.
(3)Assuming that only 70 percent of the warrants are exercised,prepare a journal entry for Rand to record the exercise and expiration of the warrants.

The Rand Company Wants to Raise Additional Equity Capital