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On March 1, 2016, E Corp. issued $1,500,000 of 15% nonconvertible bonds at 105, due on February 28, 2026. Each $1,000 bond was issued with 45 detachable stock warrants, each of which entitled the holder to purchase, for $65, one share of Evan's $40 par common stock. On March 1, 2016, the market price of each warrant was $5. By what amount should the bond issue proceeds increase shareholders' equity? A. $75,000 B. $337,500 C. $363,500 D. $0

On March 1, 2016, E Corp. issued $1,500,000 of 15% nonconvertible bonds at 105, due on February 28, 2026. Each $1,000 bond was issued with 45 detachable stock warrants, each of which entitled the holder to purchase, for $65, one share of Evan's $40 par common stock. On March 1, 2016, the market price of each warrant was $5. By what amount should the bond issue proceeds increase shareholders' equity? A. $75,000 B. $337,500 C. $363,500 D. $0

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 March 1, 2016, E Corp. issued $1,500,000 of 15% nonconvertible bonds at 105, due on February 28, 2026. Each $1,000 bond was issued with 45 detachable stock warrants, each of which entitled the holder to purchase, for $65, one share of Evan's $40 par common stock. On March 1, 2016, the market price of each warrant was $5. By what amount should the bond issue proceeds increase shareholders' equity? A. $75,000 B. $337,500 C. $363,500 D. $0
Transcribed Image Text:On March 1, 2016, E Corp. issued $1,500,000 of 15% nonconvertible bonds at 105, due on February 28, 2026. Each $1,000 bond was issued with 45 detachable stock warrants, each of which entitled the holder to purchase, for $65, one share of Evan's $40 par common stock. On March 1, 2016, the market price of each warrant was $5. By what amount should the bond issue proceeds increase shareholders' equity? A. $75,000 B. $337,500 C. $363,500 D. $0
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