The following information is the same as the previous question. A Company issued a bond payable with detachable warrants on January 1, 20X1 as follows. Bond payable ($1,000 par value; 400 bonds) Coupon rate Bond issue price Fair value of the bonds after issuance Term Number of detachable warrants per bond $400,000 4.70% $414,000 $390,000 10 years 50 $2.00 $15.00 Fair value of the warrants after issuance Stock purchase price 5,000 Warrants exercised 1 warrant = 1 share of $1 par value stock What is the credit to additional paid in capital at the time the warrants are exercised on June 30, 20X1?
The following information is the same as the previous question. A Company issued a bond payable with detachable warrants on January 1, 20X1 as follows. Bond payable ($1,000 par value; 400 bonds) Coupon rate Bond issue price Fair value of the bonds after issuance Term Number of detachable warrants per bond $400,000 4.70% $414,000 $390,000 10 years 50 $2.00 $15.00 Fair value of the warrants after issuance Stock purchase price 5,000 Warrants exercised 1 warrant = 1 share of $1 par value stock What is the credit to additional paid in capital at the time the warrants are exercised on June 30, 20X1?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following information is the same as the previous question.
A Company issued a bond payable with detachable warrants on January 1, 20X1 as follows.
Bond payable ($1,000 par value; 400 bonds)
Coupon rate
Bond issue price
Fair value of the bonds after issuance
Term
Number of detachable warrants per bond
$400,000
4.70%
$414,000
$390,000
10 years
50
$2.00
$15.00
Fair value of the warrants after issuance
Stock purchase price
Warrants exercised
5,000
warrant = 1 share of $1 par value stock
What is the credit to additional paid in capital at the time the warrants are exercised on June 30, 20X1?
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