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1. What is the carrying amount of the bonds payable on the date of issuance? a. 5,000,000 b. 4,750,000 c. 5,150,000 d. 4,550,000

1. What is the carrying amount of the bonds payable on the date of issuance? a. 5,000,000 b. 4,750,000 c. 5,150,000 d. 4,550,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the beginning of current year, Case Company issued P5,000,000 of 12% nonconvertible bonds payable at 103 which purchase, for P50, one ordinary share of Case Company, pa In addition, each P1,000 bond was issued with 30 detachable On the date of issuance, the quoted market value of each share warrants, each of which entitled the bondholder t. warrant was P4. The market value of the bonds ex-warrants Problem 7-11 (AICPA are due in five years. , par value P25. at the time of issuance is 95. 1. What is the carrying amount of the bonds payable on the date of issuance? a. 5,000,000 b. 4,750,000 c. 5,150,000 d. 4,550,000 2. What amount of the proceeds from the bond issue should be recognized as an increase in shareholders' equity? a. 600,000 b. 300,000 c. 200,000 d. 400,000 3. What amount is credited to share premium if all of the share warrants are exercised? a. 4,350,000 b. 3,750,000 c. 4,150,000 d.
Transcribed Image Text:At the beginning of current year, Case Company issued P5,000,000 of 12% nonconvertible bonds payable at 103 which purchase, for P50, one ordinary share of Case Company, pa In addition, each P1,000 bond was issued with 30 detachable On the date of issuance, the quoted market value of each share warrants, each of which entitled the bondholder t. warrant was P4. The market value of the bonds ex-warrants Problem 7-11 (AICPA are due in five years. , par value P25. at the time of issuance is 95. 1. What is the carrying amount of the bonds payable on the date of issuance? a. 5,000,000 b. 4,750,000 c. 5,150,000 d. 4,550,000 2. What amount of the proceeds from the bond issue should be recognized as an increase in shareholders' equity? a. 600,000 b. 300,000 c. 200,000 d. 400,000 3. What amount is credited to share premium if all of the share warrants are exercised? a. 4,350,000 b. 3,750,000 c. 4,150,000 d.
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