On May 1, 2025, Blossom Co. issued $4400000 of 8% bonds at 103. The bonds are due on April 30, 2031. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Blossom's $15 par value common stock were attached to each $1000 bond. The bonds without the warrants would sell at 96. On May 1, 2025, the fair value of Blossom's common stock was $34 per share and of the warrants was $2. On May 1, 2025, Blossom will record a O premium of $132000. O discount of $44000, O discount of $176000. O discount of $49280.
On May 1, 2025, Blossom Co. issued $4400000 of 8% bonds at 103. The bonds are due on April 30, 2031. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Blossom's $15 par value common stock were attached to each $1000 bond. The bonds without the warrants would sell at 96. On May 1, 2025, the fair value of Blossom's common stock was $34 per share and of the warrants was $2. On May 1, 2025, Blossom will record a O premium of $132000. O discount of $44000, O discount of $176000. O discount of $49280.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On May 1, 2025, Blossom Co. issued $4400000 of 8% bonds at 103. The bonds are due on April 30, 2031. Twenty detachable stock
warrants entitling the holder to purchase for $40 one share of Blossom's $15 par value common stock were attached to each $1000
bond. The bonds without the warrants would sell at 96. On May 1, 2025, the fair value of Blossom's common stock was $34 per share
and of the warrants was $2.
On May 1, 2025, Blossom will record a
O premium of $132000.
O discount of $44000,
O discount of $176000.
O discount of $49280.
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