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On July 1, 2020, Shake Corporation issued its 10%, 7-year bonds with one detachable warrant attached to each P1,000 bond. Each warrant provides for the right to purchase 20 shares of P15 par value ordinary for P20 each. The market value of the ordinary share was P25 each at July 1, 2020. At that time, the bonds without the warrants are selling at 97. The compound financial instrument was sold at 104. What is the bond issue price allocated to the debt? * O P5,200,000 O P4,850,000 O P5,000,000 O P350,000

On July 1, 2020, Shake Corporation issued its 10%, 7-year bonds with one detachable warrant attached to each P1,000 bond. Each warrant provides for the right to purchase 20 shares of P15 par value ordinary for P20 each. The market value of the ordinary share was P25 each at July 1, 2020. At that time, the bonds without the warrants are selling at 97. The compound financial instrument was sold at 104. What is the bond issue price allocated to the debt? * O P5,200,000 O P4,850,000 O P5,000,000 O P350,000

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 July 1, 2020, Shake Corporation issued P5,000,000 of its 10%, 7-year bonds with one detachable warrant attached to each P1,000 bond. Each warrant provides for the right to purchase 20 shares of P15 par value ordinary for P20 each. The market value of the ordinary share was P25 each at July 1, 2020. At that time, the bonds without the warrants are selling at 97. The compound financial instrument was sold at 104. What is the bond issue price allocated to the debt? * P5,200,000 P4,850,000 P5,000,000 P350,000
Transcribed Image Text:On July 1, 2020, Shake Corporation issued P5,000,000 of its 10%, 7-year bonds with one detachable warrant attached to each P1,000 bond. Each warrant provides for the right to purchase 20 shares of P15 par value ordinary for P20 each. The market value of the ordinary share was P25 each at July 1, 2020. At that time, the bonds without the warrants are selling at 97. The compound financial instrument was sold at 104. What is the bond issue price allocated to the debt? * P5,200,000 P4,850,000 P5,000,000 P350,000
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