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Bond Company has 50,000 ordinary shares held by Sassa Company. Sassa acquired these 50,000 shares in 2011 at P120 per share. Bond distributed 50,000 stock rights to Sassa on August 30, 2013. Sassa has the option of purchasing one Bond Company share for P90 in cash and two of these rights. Each share had a market value of P130 on August 30, 2013, and each right had a market value of P20. If the rights are not individually accounted for, prepare the entry to record the new shares acquired by exercising the rights

Bond Company has 50,000 ordinary shares held by Sassa Company. Sassa acquired these 50,000 shares in 2011 at P120 per share. Bond distributed 50,000 stock rights to Sassa on August 30, 2013. Sassa has the option of purchasing one Bond Company share for P90 in cash and two of these rights. Each share had a market value of P130 on August 30, 2013, and each right had a market value of P20. If the rights are not individually accounted for, prepare the entry to record the new shares acquired by exercising the rights

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter20: Financing With Derivatives
Section: Chapter Questions
Problem 12P
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Bond Company has 50,000 ordinary shares held by Sassa Company. Sassa acquired these 50,000 shares in 2011 at P120 per share. Bond distributed 50,000 stock rights to Sassa on August 30, 2013. Sassa has the option of purchasing one Bond Company share for P90 in cash and two of these rights. Each share had a market value of P130 on August 30, 2013, and each right had a market value of P20. If the rights are not individually accounted for, prepare the entry to record the new shares acquired by exercising the rights. 

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