The XL Co. issued 5,000 shares of P50 par preference shares 1.000 detachable warrants at P400,000. The warrants shall enable the holder to purchase 1,000 ordinary shares of P10 par at P25 per share. Immediately after the issuance of the share, the warrants are selling at P20 per share and the market valuc of the preference without the warrants is P60. The amount to be assigned to the share warrants should be: C 30,000 O20,000 C 25.000 O None

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

12

The XL Co. issued 5,000 shares of P50 par preference shares 1,000 detachable warrants at P400,000. The warrants shall
enable the holder to purchase 1,000 ordinary shares of P10 par at P25 per share. Immediately after the issuance of the share,
the warrants are sclling at P20 per share and the market value of the preference without the warrants is P60. The amount to
be assigned to the share warrants should be:
O 30,000
C 20,000
C 25.000
O None
Transcribed Image Text:The XL Co. issued 5,000 shares of P50 par preference shares 1,000 detachable warrants at P400,000. The warrants shall enable the holder to purchase 1,000 ordinary shares of P10 par at P25 per share. Immediately after the issuance of the share, the warrants are sclling at P20 per share and the market value of the preference without the warrants is P60. The amount to be assigned to the share warrants should be: O 30,000 C 20,000 C 25.000 O None
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Accounting for Financial Instruments
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education