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shown in the image. What amount should Maine credit to premium on bonds payable?

shown in the image. What amount should Maine credit to premium on bonds payable?

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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7. On May 1, 2012, Maine Company issued P2 million 20- year, 10% bonds for P2,120,000. Each P1,000 bond had a detachable warrant eligible for the purchase of one share of Maine's P50 par ordinary share for P60. Immediately after the bonds were issued, Maine's securities had the market values as shown in the image. What amount should Maine credit to premium on bonds payable? * 10% Bond without warrant P1,040 Warrant 20 Ordinary share, P50 par 56 a. P120,000 b. P80,000 O c. P40,000 d. PO
Transcribed Image Text:7. On May 1, 2012, Maine Company issued P2 million 20- year, 10% bonds for P2,120,000. Each P1,000 bond had a detachable warrant eligible for the purchase of one share of Maine's P50 par ordinary share for P60. Immediately after the bonds were issued, Maine's securities had the market values as shown in the image. What amount should Maine credit to premium on bonds payable? * 10% Bond without warrant P1,040 Warrant 20 Ordinary share, P50 par 56 a. P120,000 b. P80,000 O c. P40,000 d. PO
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