A company issued $400,000 of 7% bonds at 102. One detachable stock warrant entitling the holder to purchase one share of common stock was attached to each $1,000 bond. On the day of this issuance, the bonds without the warrants would sell at 95, the fair value of the warrant was $300 per warrant. How much Discount/Premium on Bonds Payable should be recorded for this issuance? (Just enter an amount. Do not put a plus or minus sign in front of the amount
A company issued $400,000 of 7% bonds at 102. One detachable stock warrant entitling the holder to purchase one share of common stock was attached to each $1,000 bond. On the day of this issuance, the bonds without the warrants would sell at 95, the fair value of the warrant was $300 per warrant. How much Discount/Premium on Bonds Payable should be recorded for this issuance? (Just enter an amount. Do not put a plus or minus sign in front of the amount
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter7: Financial Activities
Section: Chapter Questions
Problem 11QE
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A company issued $400,000 of 7% bonds at 102. One detachable stock warrant entitling the holder to purchase one share of common stock was attached to each $1,000 bond. On the day of this issuance, the bonds without the warrants would sell at 95, the fair value of the warrant was $300 per warrant.
How much Discount/Premium on Bonds Payable should be recorded for this issuance? (Just enter an amount. Do not put a plus or minus sign in front of the amount.)
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