Sh12 The proceeds from the sale of debt with detachable stock warrants should be allocated between the two securities based on the:O face value of the bonds and market value of the warrants.O aggregate fair market value of the bonds and the warrants.O fair market value of the bonds.O face value of the bonds.

Answered: e proceeds from the sale of debt with…

e proceeds from the sale of debt with detachable stock warrants should be allocated between the two securities based on the:

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 10MC: The effective-interest method of bond amortization finds the difference between the ________ times...

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Question

Sh12

The proceeds from the sale of debt with detachable stock warrants should be allocated between the two securities based on the:
O face value of the bonds and market value of the warrants.
O aggregate fair market value of the bonds and the warrants.
O fair market value of the bonds.
O face value of the bonds.

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How shall the equity component of a bonds payable issued with share warrants be valued? a.)issue price less the market value of the bonds warrants-on b.)fair value of the share warrants c.)issue price less the market value of the bonds ex-warrants d.)allocation of the issue price basing on the fair value of both bonds and share warrants
Bond premium should be reported in the statement of financial position A. at the present value of the future reduction in bond interest expense due to the premium. B. as a direct addition to the face amount of the bonds. C. as a deferred credit. D. along with other premium accounts such as those resulting from share capital transactions.
How is the premium or discount on debt investments at fair value through profit or loss accounted for? As part of amortized cost and amortized over the life of the bonds. As part of the cost until the disposal of the asset. As expense or revenue in the period the bonds are purchased. All of the above.
GAAP requires investments in bonds classified as trading securities to be reported at their: A. fair value. B. net realizable value. C. maturity value. D. historical cost.
Which of the following is not a valid statement regarding bonds payable? a. Bonds issued by an entity represent a financial liability and shall be measured at amortized cost using the effective interest method. b. The market price of a bond issue is the present value of its principal amount plus the present value of all future interest payments, both discounted at the market rate of interest when the bonds were issued. c. Bonds that mature at a single date are called term bonds. d. The amortization of a bond premium increases both the recorded interest expense and amortized cost.
According to the PFRS, discount or premium on bonds payable may be amortized using the straight-line method.
Any unamortized premium should be reported on the balance sheet of the issuing corporation as a. paid-in capital b. a direct deduction from the face amount of the bonds in the Liabilities section c. an addition to the face amount of the bonds in the Liabilities section d. a direct deduction from retained earnings
The balance in Unamortized Premium on Bonds Payable should be O a. reported separately in the Current Liabilities section of the talance sheet. O b. added to the face amount of the related bonds payable on the balance sheet, O C. reported in the Paid-In Capital section of the balance sheet. Od. reported on the balance sheet as a deduction from the face amount of the related bonds payable.
Bonds which are collateralized by specific assets in the event the borrowing company defaults on bond payments are called: Select one: a. serial bonds. b. callable bonds. c. unsecured bonds. d. secured bonds. e. convertible bonds.
. Distinguish between the following values relative to bonds payable: a. Maturity value. b. Face value. c. Market (fair) value. d. Par value.
When the cash proceeds from a bond issued with detachable stock purchase warrants exceed the sum of the par value of the bonds and the fair value of the warrants, the excess should be credited to:a. Additional Paid-in Capitalb. Retained Earningsc. Premium on Bonds Payabled. Detachable Stock Warrants Outstanding
The premium on bonds payable account is shown on the balance sheet as A contra asset. A reduction of an expense. An addition to a long-term liability. A subtraction from a long-term liability.