Pilsen Company issues 12% bonds with a face value of $10,000 and 600 shares of $10 par common stock in a combined sale, receiving total proceeds of $23,000 on December 31. Required:
Record the transaction for each independent assumption shown:
1. The common stock has a current market value of $21 per share; the market value of the bonds is not known.
2. The common stock has a current market value of $24.50 per share; the bonds are selling at 98.

1.  Date       Journal Entry         Debit                 Credit  

   Dec 31     Cash                    $23,000

                         Common stock                           $6,000

                         (600*10)

                         Additional paid in capital           $6,600

                         Common stock ( 600*(21-10))

                         Bonds payable                           $10,000  

                         Premium on Bonds payable      $400

2. Date       Journal Entry                              Debit           Credit

   Dec 31     Cash                                          $23,000

                   Discount on Bonds payable     $800

                          Common stock                                       $6,000

                          (600*10)

                          Additional paid in capital                        $7,800

                          - Common stock ( 13800-6000)

                          Bonds payable                                        $10,000

Workings

Market value of common stock =600*24.50  = $14700

Market value of Bonds = 10000*0.98 = $9800

Total Market value = $24500

Allocated to Common stock=23000*14700/24500 = $13800

Allocated to bonds = 23000*9800/24500 = $9200

the answer is d i just took the test (provides the number of allowances an employee has claimed.)