TDC Company issued a 3-year,12%, 2,000 of P 1,000 face value bonds with warrants at 98 on January 1, 2020. The nominal rate is payable annually on December 31. When the bonds are issued, the prevailing market rate of interest for similar bonds without warrants is 15% per annum. Each bond is accompanied by a warrant that permits the bondholder to purchase 20 shares of common stock, par P 30, at P45 per share. How much is the amount allocated to warrants to be recognized by ABC Company? (For present value factors, do not round off)
TDC Company issued a 3-year,12%, 2,000 of P 1,000 face value bonds with warrants at 98 on January 1, 2020. The nominal rate is payable annually on December 31. When the bonds are issued, the prevailing market rate of interest for similar bonds without warrants is 15% per annum. Each bond is accompanied by a warrant that permits the bondholder to purchase 20 shares of common stock, par P 30, at P45 per share. How much is the amount allocated to warrants to be recognized by ABC Company? (For present value factors, do not round off)
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 5PA: Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July...
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TDC Company issued a 3-year,12%, 2,000 of P 1,000 face
How much is the amount allocated to warrants to be recognized by ABC Company? (For present value factors, do not round off)
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