On May 1, 2021, Duck Corporation issued $2,000,000 of 8% nonconvertible bonds at 104, which are due on June 30, 2041. In addition, each $1,000 bond was issued with 25 detachable stock warrants, each of which entitled the bondholder to purchase for $50 one share of Duck common stock, par value $25. The bonds without the warrants would normally sell at 95. On May 1, 2021, the fair value of Duck's common stock was $40 per share and the fair value of the warrants was $2.00. What amount should Duck record on May 1, 2021 as paid-in capital from stock warrants? O $100,000 O $73,600 O $104,000 $85,200
On May 1, 2021, Duck Corporation issued $2,000,000 of 8% nonconvertible bonds at 104, which are due on June 30, 2041. In addition, each $1,000 bond was issued with 25 detachable stock warrants, each of which entitled the bondholder to purchase for $50 one share of Duck common stock, par value $25. The bonds without the warrants would normally sell at 95. On May 1, 2021, the fair value of Duck's common stock was $40 per share and the fair value of the warrants was $2.00. What amount should Duck record on May 1, 2021 as paid-in capital from stock warrants? O $100,000 O $73,600 O $104,000 $85,200
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter7: Financial Activities
Section: Chapter Questions
Problem 11QE
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![On May 1, 2021, Duck Corporation issued $2,000,000 of 8% nonconvertible bonds at
104, which are due on June 30, 2041. In addition, each $1,000 bond was issued with
25 detachable stock warrants, each of which entitled the bondholder to purchase for
$50 one share of Duck common stock, par value $25. The bonds without the warrants
would normally sell at 95. On May 1, 2021, the fair value of Duck's common stock was
$40 per share and the fair value of the warrants was $2.00. What amount should
Duck record on May 1, 2021 as paid-in capital from stock warrants?
O $100,000
O $73,600
O $104,000
O $85,200
L
ASA](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F81ee3775-40e9-4f25-b683-ca8b48e3cd62%2F99504b3f-609d-46e5-a9a9-91db0798b2c0%2Flqev9vs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On May 1, 2021, Duck Corporation issued $2,000,000 of 8% nonconvertible bonds at
104, which are due on June 30, 2041. In addition, each $1,000 bond was issued with
25 detachable stock warrants, each of which entitled the bondholder to purchase for
$50 one share of Duck common stock, par value $25. The bonds without the warrants
would normally sell at 95. On May 1, 2021, the fair value of Duck's common stock was
$40 per share and the fair value of the warrants was $2.00. What amount should
Duck record on May 1, 2021 as paid-in capital from stock warrants?
O $100,000
O $73,600
O $104,000
O $85,200
L
ASA
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