On December 30, year 1, Fort, Inc. issued 1,000 of its 8%, ten-year, P1,000 face value bonds with detachable stock warrants at par. Each bond carried a detachable warrant for one share of Fort’s common stock at a specified option price of P25 per share. Immediately after issuance, the market value of the bonds without the warrants was P1,080,000 and the market value of the warrants was P120,000. In its December 31, year 1 balance sheet, what amount should Fort report as bonds payable? a. P1,000,000 b. P900,000 c. P880,000 d. P975,000

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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16. On December 30, year 1, Fort, Inc. issued 1,000 of its 8%, ten-year, P1,000 face value bonds with detachable stock warrants at par. Each bond carried a detachable warrant for one share of Fort’s common stock at a specified option price of P25 per share. Immediately after issuance, the market value of the bonds without the warrants was P1,080,000 and the market value of the warrants was P120,000. In its December 31, year 1 balance sheet, what amount should Fort report as bonds payable?

a. P1,000,000

b. P900,000

c. P880,000

d. P975,000

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