Problem 24-1 (AICPA Adapted) At the beginning of current year, Case Company issued P5,000,000 of 12% nonconvertible 5-year bonds at 103. In addition, each P1,000 bond was issued with 30 detachable share warrants, each of which entitled the bondholder to purchase, for P50, one ordinary share of Case Company, par value P25. The quoted market value of each warrant was P4. The market value of the bonds ex-warrants at the time of issuance is 95. 1. What is the carrying amount of the bonds payable? a. 5,000,000 b. 4,750,000 c. 5,150,000 d. 4,550,000 2. What amount of the proceeds from the bond issue should be recognized as an increase in shareholders' equity? a. 600,000 b. 300,000 c. 200,000 d. 400,000

Problem 24-1 (AICPA Adapted) At the beginning of current year, Case Company issued P5,000,000 of 12% nonconvertible 5-year bonds at 103. In addition, each P1,000 bond was issued with 30 detachable share warrants, each of which entitled the bondholder to purchase, for P50, one ordinary share of Case Company, par value P25. The quoted market value of each warrant was P4. The market value of the bonds ex-warrants at the time of issuance is 95. 1. What is the carrying amount of the bonds payable? a. 5,000,000 b. 4,750,000 c. 5,150,000 d. 4,550,000 2. What amount of the proceeds from the bond issue should be recognized as an increase in shareholders' equity? a. 600,000 b. 300,000 c. 200,000 d. 400,000

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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