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On May 1, 2018, Luzon Company issued P2,000,000, 5 year, 10% bonds for P2,300,00O. Each P1,000 bonds had two detachable warrants eligible for the purchase of one share of Luzon's P100 par ordinary share for P120. Without the warrants the bonds are selling at P2,078,000. What amount should Luzon Company recognize as value of the share warrants? *

On May 1, 2018, Luzon Company issued P2,000,000, 5 year, 10% bonds for P2,300,00O. Each P1,000 bonds had two detachable warrants eligible for the purchase of one share of Luzon's P100 par ordinary share for P120. Without the warrants the bonds are selling at P2,078,000. What amount should Luzon Company recognize as value of the share warrants? *

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 May 1, 2018, Luzon Company issued P2,000,000, 5 year, 10% bonds for P2,300,00O. Each P1,000 bonds had two detachable warrants eligible for the purchase of one share of Luzon's P100 par ordinary share for P120. Without the warrants the bonds are selling at P2,078,000. What amount should Luzon Company recognize as value of the share warrants?
Transcribed Image Text:On May 1, 2018, Luzon Company issued P2,000,000, 5 year, 10% bonds for P2,300,00O. Each P1,000 bonds had two detachable warrants eligible for the purchase of one share of Luzon's P100 par ordinary share for P120. Without the warrants the bonds are selling at P2,078,000. What amount should Luzon Company recognize as value of the share warrants?
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