On December 30, 2021, First Company issued 5,000 of 8%, 10-year, P 1,000 face value bonds with share warrants at 110. Each bond carried a warrant for one share of First Company at a specified option price of P25 per share. Immediately after issuance, the market value of the bonds without the warrants was P5,400,000 and the market value of the warrants was P600,000. In the December 31, 2021 statement of financial position, what should be reported as carrying amount of bonds payable?
On December 30, 2021, First Company issued 5,000 of 8%, 10-year, P 1,000 face value bonds with share warrants at 110. Each bond carried a warrant for one share of First Company at a specified option price of P25 per share. Immediately after issuance, the market value of the bonds without the warrants was P5,400,000 and the market value of the warrants was P600,000. In the December 31, 2021 statement of financial position, what should be reported as carrying amount of bonds payable?
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 5P
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On December 30, 2021, First Company issued 5,000 of 8%, 10-year, P 1,000 face
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