Siena sold $120, 000 of 6% bonds for $127, 125.Each $1, 000 bond carried five warrants and each warrant allowed the holder to acquire one share of $5 par common stock for $20 a share.After the issuance of the securities, the bonds were quoted at 108 and the warrants were quoted at $10.Later, one-fourth of the rights were exercised.
Required:
Journalize the exercise of the warrants.

Warrants

Financial derivatives that give the holder the right, but not the obligation, to buy or sell a security at a specified price before a certain date.

Common Stock

Equity security representing ownership in a corporation, providing voting rights and entitling the holder to a share of the company's success through dividends and/or capital appreciation.

Journalize

The process of recording transactions and events in the accounting journals as part of the accounting cycle.