The equity component of a compound financial instrument is determinedO A. by allocating the issue price to the liability and equity components based on theirrelative fair values.B. by allocating the equity component its fair value,O c. by deducting the fair value of the liability component without the equity featurefrom the net proceeds from the issuance of the compound instrumentD. by multiplying the no. of shares at its FMVO E. By multiplying the no. of shares at its par value

Equity is the component of the shareholders' equity that includes only the portion of ownership in…

Answered: The equity component of a compound…

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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Similar questions

The Share Premium-Ordinary account represents the amount of legal capital. is reported as part of equity on the statement of financial position. is credited when a no-par share does not have a stated value. normally has a debit balance. OOO
The share premium and the revaluation reserve are both revenue related, however the retained earnings is capital/equity related -true -galse
Which of the following are Assets, Liabilities, EquityAccounts PayableCommon StockBonds PayableFurniture and FixturesInventoryInterest PayableDividentsAdditional paid-in-capitalPatents and copyrightsShort-term investments
Which of the following are recognized as liability?I. Cash dividends payableII. Share dividends distributableIII. Scrip dividends payableIV. Property dividends payable a. All are recognized as liability. b. I and II only. c. I and III only d. I, II and IV only
Which of the following costs of a business combination can be included in the value charged to paid-in-capital in excess of par? direct and indiırect acquisition costs O direct acquisition costs direct acquisition costs and stock issue costs if stock is issued as consideration stock issue costs if stock is issued as consideration
When using the equity method of accounting, when is revenue recorded on the books of the investor company?a. When the fair value of the affiliate stock increases.b. When a dividend is received from the affiliate.c. When the affiliate company reports net income.d. Both b and c above.
Please do not give solution in image format ?
What is reflected in the additional paid-in capital account?Required to answer. Single choice. a. Whichever is higher of (1) the difference between the market price and the par value when the stock was issued and (2) the difference between the market price and the par value when the stock was reacquired b. Whichever is lower of (1) the difference between the market price and the par value when the stock was issued and (2) the difference between the market price and the par value when the stock was reacquired c. The difference between the market price and the par value when the stock was reacquired d. None of the above e. The difference between the market price and the par value when the stock was issued.
Please answer with reason for all why the option is correct and why the other options are incorrect
(16)
2. Each of the three categories of investments in debt and equity securities have similar accounting for all of the following transactions, except for a. initial recording of costb. recognition of dividend and interest incomec. recognition of realized gains or losses on salesd. recognition of unrealized holding gains and losses

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