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credit to Premium on Bonds Payable?

credit to Premium on Bonds Payable?

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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On May 1, 2020, Fries Corporation issued P2,000,000, 20-year, 10% bonds for P2,120,000. Each P1,000 bond had a detachable warrant eligible for the purchase of one share of Fries' P50 par ordinary share for P60. Immediately after the bonds were issued, Fries' securities had the following market values: 10% bonds without warrants – P1,040; Warrant – P20; Ordinary share, P50 par – P56. What amount should Fries Corporation credit to Premium on Bonds Payable? * P80,000 P40,000 P120,000 PO
Transcribed Image Text:On May 1, 2020, Fries Corporation issued P2,000,000, 20-year, 10% bonds for P2,120,000. Each P1,000 bond had a detachable warrant eligible for the purchase of one share of Fries' P50 par ordinary share for P60. Immediately after the bonds were issued, Fries' securities had the following market values: 10% bonds without warrants – P1,040; Warrant – P20; Ordinary share, P50 par – P56. What amount should Fries Corporation credit to Premium on Bonds Payable? * P80,000 P40,000 P120,000 PO
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