WarrantsCommon StocksBond with detachable warrantBonds amount$ 100$ 110Par valueDetachable per bondFair value (prior selling)Fair value (post selling)100Par Value241002$Fair valueFair Value sale without warrant102%2$30Additional cash per shareSale at par value2$10,000 →100%Using the information above, prepare the Journal Entries for the borrower AND the investor.Actions to take:1. Selling of bond and detachable warrants.2. Exercise of warrant.3. Expiration of warrant.

As per U.S. GAAP, when stock warrants are issued, the issue/sale price should be allocated between…

Common Stocks Bond with detachable warrant Bonds amount Warrants $ 100 $ 110 1 Par value Detachable per bond Fair value (prior selling) Fair value (post selling) 100 Par Value $ 100 $ Fair value Fair Value sale without warrant 102% $ 30 Additional cash per share $ Sale at par value %24 10,000 → 100% Using the information above, prepare the Journal Entries for the borrower AND the investor. Actions to take: 1. Selling of bond and detachable warrants. 2. Exercise of warrant. 3. Expiration of warrant.

Common Stocks Bond with detachable warrant Bonds amount Warrants $ 100 $ 110 1 Par value Detachable per bond Fair value (prior selling) Fair value (post selling) 100 Par Value $ 100 $ Fair value Fair Value sale without warrant 102% $ 30 Additional cash per share $ Sale at par value %24 10,000 → 100% Using the information above, prepare the Journal Entries for the borrower AND the investor. Actions to take: 1. Selling of bond and detachable warrants. 2. Exercise of warrant. 3. Expiration of warrant.

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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