During 2018, QQ Corporation issued at 95, 1,000 of its 8%, P5,000 bonds due in ten years. One detachable stock purchase warrants entitling the holder to buy 20 shares of QQ’s ordinary shares was attached to each bond. Shortly after issuance, the bonds are selling at 10% ex-warrant, and each warrant was quoted at P60.
During 2018, QQ Corporation issued at 95, 1,000 of its 8%, P5,000 bonds due in ten years. One detachable stock purchase warrants entitling the holder to buy 20 shares of QQ’s ordinary shares was attached to each bond. Shortly after issuance, the bonds are selling at 10% ex-warrant, and each warrant was quoted at P60.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During 2018, QQ Corporation issued at 95, 1,000 of its 8%, P5,000 bonds due in ten years. One detachable stock purchase warrants entitling the holder to buy 20 shares of QQ’s ordinary shares was attached to each bond. Shortly after issuance, the bonds are selling at 10% ex-warrant, and each warrant was quoted at P60.
What is the fair
What amount, if any, of the proceeds from the bond issuance should be recorded as part of QQ’s shareholders’ equity?
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