On January 1, 2016, Case Company issued P5,000,000 of 12% nonconvertible bonds at 103 which are due on February 28, 2021. In addition, each P1,000 bond was issued with 30 detachable share warrants, each of which entitled the bondholder to purchase, for P 50, one ordinary share of Case Company, par value P25. On January 1, 2016m the quoted market value of each warrant was P4. The market value of the bonds ex-warrants at the time of issuance is 95. What is the carrying amount of the bonds payable on January 1, 2016? 5,000,000 4,750,000 5,150,000 4,550,000 What amount of the proceeds from the bond issue should be recognized as an increase in shareholders’ equity? 600,000 300,000 200,000 400,000
On January 1, 2016, Case Company issued P5,000,000 of 12% nonconvertible bonds at 103 which are due on February 28, 2021. In addition, each P1,000 bond was issued with 30 detachable share warrants, each of which entitled the bondholder to purchase, for P 50, one ordinary share of Case Company, par value P25. On January 1, 2016m the quoted market value of each warrant was P4. The market value of the bonds ex-warrants at the time of issuance is 95. What is the carrying amount of the bonds payable on January 1, 2016? 5,000,000 4,750,000 5,150,000 4,550,000 What amount of the proceeds from the bond issue should be recognized as an increase in shareholders’ equity? 600,000 300,000 200,000 400,000
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...
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On January 1, 2016, Case Company issued P5,000,000 of 12% nonconvertible bonds at 103 which are due on February 28, 2021.
In addition, each P1,000 bond was issued with 30 detachable share warrants, each of which entitled the bondholder to purchase, for P 50, one ordinary share of Case Company, par value P25.
On January 1, 2016m the quoted market value of each warrant was P4. The market value of the bonds ex-warrants at the time of issuance is 95.
What is the carrying amount of the bonds payable on January 1, 2016?
5,000,000
4,750,000
5,150,000
4,550,000
What amount of the proceeds from the bond issue should be recognized as an increase in shareholders’ equity?
600,000
300,000
200,000
400,000
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