On May 1, 2021, Payne Co. issued $1,500,000 of 7% bonds at 103, which are due on April 30, 2031. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Payne's common stock, $15 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2021, the fair value of Payne's common stock was $35 per share and of the warrants was $2. On May 1, 2021, Payne should credit Paid-in Capital from Stock Warrants for
On May 1, 2021, Payne Co. issued $1,500,000 of 7% bonds at 103, which are due on April 30, 2031. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Payne's common stock, $15 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2021, the fair value of Payne's common stock was $35 per share and of the warrants was $2. On May 1, 2021, Payne should credit Paid-in Capital from Stock Warrants for
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 10MC
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On May 1, 2021, Payne Co. issued $1,500,000 of 7% bonds at 103, which are due on April 30, 2031. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Payne's common stock, $15 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2021, the fair value of Payne's common stock was $35 per share and of the warrants was $2.
On May 1, 2021, Payne should credit Paid-in Capital from Stock Warrants for
a. $61,800.
b. $105,000.
c. $60,000.
d. $57,600.
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