On August 1, 2020, Peyton Technology issued $900,000 of 7% bonds at 103. Bonds are due on July 31, 2030. Each $1,000 bond was issued with 20 detachable stock warrants entitling the bondholder to purchase one share of common stock (par value $15) for $40. On the date of issue, the fair value of the stock was $35 per share and the fair value of the warrants was $2. If Peyton's bonds sell at 96 without the warrant, how much should Peyton record as paid-in capital from the warrants? O $63,000. O $37,080. O $36,000. O $34,560.

On August 1, 2020, Peyton Technology issued $900,000 of 7% bonds at 103. Bonds are due on July 31, 2030. Each $1,000 bond was issued with 20 detachable stock warrants entitling the bondholder to purchase one share of common stock (par value $15) for $40. On the date of issue, the fair value of the stock was $35 per share and the fair value of the warrants was $2. If Peyton's bonds sell at 96 without the warrant, how much should Peyton record as paid-in capital from the warrants? O $63,000. O $37,080. O $36,000. O $34,560.

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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