At the beginning of current year, Case Company issued P5,000,000 of 12% nonconvertible bonds payable at 103 which are due in five years. 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. On the date of issuance, 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 amount is credited to share premium if all of the share warrants are exercised? A. 4,350,000
At the beginning of current year, Case Company issued P5,000,000 of 12% nonconvertible bonds payable at 103 which are due in five years. 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. On the date of issuance, 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 amount is credited to share premium if all of the share warrants are exercised? A. 4,350,000
Chapter6: Bonds (debt) - Characteristics And Valuation
Section: Chapter Questions
Problem 9PROB
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Problem 7-11
At the beginning of current year, Case Company issued P5,000,000 of 12% nonconvertible bonds payable at 103 which are due in five years.
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.
On the date of issuance, the quoted market value of each warrant was P4. The market
1. What amount is credited to share premium if all of the share warrants are exercised?
A. 4,350,000
B. 3,750,000
C. 4,150,000
D. 0
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