The proceeds from a bond issued with non-detachable share purchase warrants should be accounted for entirely as bonds payable entirely as shareholders’ equity partially as unearned revenue and partially as bonds payable partially as shareholders’ equity and partially as bonds payable
Q: A corporation recognizes a gain or loss O only when bonds are converted into common stock. when…
A: Redemption of Bond: When interest rates fall dramatically, bond issuers are forced to redeem their…
Q: In terms of public offerings of bonds, what is an indenture? A) a list of the duties of a trust…
A: Bond: It acts between any investor and a company like a loan.
Q: Which of the following are differences between a bond and a common stock? (Select all that…
A: Debt markets are markets where you contribute within the institutions or trade substances by the…
Q: Fill in the blanks. _______ are available for distribution to shareholders unless, ______ by…
A: SOLUTION DIVIDEND A PART OF THE COMPANY'S PROFIT THAT IS PAID TO THE PEOPLE WHO OWNS SHARES IN IT (…
Q: Which of the following statements are true about unsecured bonds? I. Income bonds require interest…
A: Unsecured bonds are backed by the issuer's "full faith and credit," rather than a specific asset. In…
Q: 5. A gain or loss may arise from which of the following? a. The initial recognition of the debt and…
A: Liabilities are the obligation of the business towards third parties, or two internal employees, or…
Q: Retained earnings must be appropriated if there are treasury shares due to: A. contractual…
A: Appropriation of retained earnings is created by the company for a specific purpose voluntarily. It…
Q: A convertible bond can be convert into share of the company at the option of the: holder regulator…
A: Convertible bond are the bonds that can be converted into common stock at a future date. Such bond…
Q: Debt securities acquired by a corporation which are accounted for by recognizing unrealized holding…
A: Solution: Debt securities acquired by a corporation which are accounted for by recognizing…
Q: When holding held-to-maturity securities, a company should disclose at each balance sheet date the…
A: We shall answer the first question since the exact question wasn't specified. Please resubmit a new…
Q: Which of the following best represents the hierarchy of creditor and stockholder claims? Group of…
A: Creditors are the accounts payable and other payables of the organisation, to whom business has to…
Q: A parent company buys bonds on the open market that had been previously issued by its subsidiary.…
A: A parent company is a company which holds controlling interest in another company. Parent company…
Q: A parent company buys bonds on the open market that had been previously issued by its subsidiary.…
A: Answer: Option b:
Q: Interest revenue on bonds is reported as Group of answer choices an addition to the investment in…
A: Interest revenue on bonds is non operating revenue. So it is not operating income.
Q: The proceeds from a bond issued with detachable share warrants should be accounted for A. entirely…
A: Bonds are known as a cheaper source of finance because their interest is a tax-saving item. share…
Q: What are the advantages of holding stock in a company versus holding bonds issued by the same…
A: Stock is a security that represents the ownership of the fraction of a corporation. Bond is a debt…
Q: A subsidiary has (1) a convertible preferred stock and (2) a convertible bond. How are these items…
A: Earnings per share (EPS)represent the amount of income earned per share of outstanding common stock…
Q: that represent partial ownership of a firm. Sha
A: Loan or bond are the securities that represents lender or long term financial creditors of the firm.…
Q: A parent company acquires from a third party bonds that had been issued originally by one of its…
A: The bonds which are purchased from the third party will be eliminated from the consolidated records…
Q: The major difference between a convertible debt and share warrants is that upon exercise of the…
A: A share warrant is an certificate/deed issued by company to a person which entitiles them shares or…
Q: Equity instruments include all of the following, except * A. Preference shares B. Corporate bonds…
A: There are two types of instruments which can be issued by an organisation to raise the fund. These…
Q: Corporate bonds that can be exchanged for shares of the corporation’s common stock ifcertain…
A: Corporate bond: It can be defined as a debt security, usually issued by the public or private…
Q: The proceeds from a bond issued with non-detachable share purchase warrants should be accounted for…
A: Non detachable share purchase warrants are those right to purchase shares that are attached with the…
Q: When a company's only potential common shares are convertible bonds:
A: Diluted EPS: Diluted EPS is an option what If the Convertible preference share, options are…
Q: What is a noncontrolling interest? Select one: A. A component of debt representing amounts owed to a…
A: When a company holds less than 50% stake in another company then that part of holding is known as…
Q: Under IFRS, how are convertible debt recorded? Convertible debt is separated into equity component…
A: Solution: Under IFRS, convertible debt are recorded as "Convertible debt is separated into equity…
Q: 1. Investments in debt securities are classified for accounting purposes as: A. Financial asset at…
A: Debt investments and equity investments recorded using the cost method are classified as trading…
Q: When the conversion of bonds payable to common stock is recorded under the market value method and…
A: Journal entry will be - bonds payable debit…
Q: When holding available-for-sale securities, a company should disclose for each income statement…
A: It is investment in debt or equity but it intent to sale before its maturity.
Q: Statement 1: Upon issue of share rights, the issuing corporation records the transaction by…
A: The term "preference shares" refers to shares of a company's stock that have dividends that are paid…
Q: Equity securities can be classified as either current assets or long-term assets. Regardless of its…
A: Investment are assets held by enterprises to earn revenue or interest out of it or can be held for…
Q: against the related share premium b. Charged to an expense account c. Written off directly against…
A: (a) Charged against the related share premium
Q: A parent business purchases bonds on the open market that had previously been issued by a subsidiary…
A: The answer:
Q: Which of the following is not a capital market instrument? a. Corporate stock b. Mortgages c.…
A: A capital market is a marketplace for financial investments that are either direct or indirect…
Q: share capital of a company may consis
A: Share capital indicating simply the capital gained by the company by issuing shares. It may issued…
Q: If share warrants were exercised by the holder of compound financial instrument, liability would…
A: Journal entry: It is the first step of recording transactions of a company. Before this, no other…
Q: :A dicount on bonds payable .Occurs when a corporation issues bonds with a stated rate more than the…
A: A discount on bonds payable is a contra liability account which represents unamortized discount on…
Q: bond is a liability of the issuing company and a share of stock represents ownership in the company
A: Bonds are the instrument issued by company acknowledging the debt due from company to bond holder…
Q: Which of the following is a difference between stocks and bonds? A. Bonds may be issued by…
A: Bonds are the debt and when entities issue bonds then, they are required to pay interest on it.
Q: 2. The value of the warrants attached to a debt security (detachable) is accounted as: a) Liability…
A: Warrants are the rights that are attached with the bonds issuance which provides the right to issue…
Q: Which of the following is a reserve of a limited liability company? A. Debentures B. Ordinary share…
A: Reserved are portion of business's profits which have been set aside to strengthen the business's…
Q: All of the following would appear in the contributed capital section of shareholders' equity on the…
A: Contributed Capital means amount of capital contributed by the shareholders of the corporation. It…
Q: It is that part of the subscribed share capital which has been paid to the corporation a.…
A: Solution: "Paid-up share capital" is that part of the subscribed share capital which has been paid…
Q: The proceeds from a bond issued with detachable share purchase warrants should be accounted for * O…
A: A bond is an instrument used by the company to take a loan. It is a kind of debt security and…
Q: Equity securities acquired by a corporation which are accounted for by recognizing unrealized…
A: When some investments are made in some other company or corporation, then it depends on the quantum…
Q: The portion of proceeds from the sale of bonds with detachable stock warrants attributable to the…
A: Option (A) additional paid-in capital account is the correct answer.
The proceeds from a bond issued with non-detachable share purchase warrants should be accounted for
- entirely as bonds payable
- entirely as shareholders’ equity
- partially as unearned revenue and partially as bonds payable
- partially as shareholders’ equity and partially as bonds payable
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 1. When an entity issued bonds payable with detachable share warrants, how will share premium be computed if the share warrants are exercised by the bondholders? (Choose an answer and explain why) a. It is the balance of the share warrants outstanding. b. It is the sum of the share warrants outstanding and total par or stated value of the shares issued. c. It is the difference between the proceeds received based on the exercise price and the total par or stated value of the shares issued. d. It is the difference between the proceeds received based on the exercise price plus the share warrants outstanding and the total par or stated value of the shares issued.If share warrants were exercised by the holder of compound financial instrument, liability would be derecognize a debit to the equity account related to share warrants will be done a credit to the equity account related to share warrants will be done share warrants outstanding account will not be affected. The proceeds from a bond issued with conversion feature should be accounted for entirely as bonds payable entirely as shareholders’ equity partially as unearned revenue and partially as bonds payable partially as shareholders’ equity and partially as bonds payableIn case of payment of convertible bonds, the balance of Share Premium - Conversion Privilege account shall be closed to A.Bonds Payable B.Share Premium - Issuance C.Premium or Discount on Bonds Payable D.Gain or loss on extinguishment
- When the cash proceeds from a bond issued with detachable stock purchase warrants exceed the sum of the par value of the bonds and the fair value of the warrants, the excess should be credited to:a. Additional Paid-in Capitalb. Retained Earningsc. Premium on Bonds Payabled. Detachable Stock Warrants OutstandingAny unamortized premium should be reported on the balance sheet of the issuing corporation as a. paid-in capital b. a direct deduction from the face amount of the bonds in the Liabilities section c. an addition to the face amount of the bonds in the Liabilities section d. a direct deduction from retained earningsEquity instruments include all of the following, except * A. Preference shares B. Corporate bonds and other debt instruments issued by the entity. C. Ordinary shares D. Warrants or options that allow the holder to purchase a fixed number of ordinary shares of the issuing entity in exchange for a fixed amount of cash or another financial asset.
- When the conversion of bonds payable to common stock is recorded under the market value method and the market value of the common stock exceeds the book value of the bonds at date of conversion, the difference is recorded as a debit to Loss on Conversion. debit to Additional Paid-in Capital−Common Stock. debit to Discount on Bonds Payable. debit to Retained Earnings.The Share Premium arising from the conversion of bonds can be computed by deducting the par value of the issued shares from the sum of the following, except a.)Conversion Privilege Premium, only to the extent converted b.)Carrying amount of the convertible bonds c.)All of these are added to get the Share Premium d.)Cash received from the conversionT or F -Under generally accepted accounting principles, gain or loss must be recognized on the conversion of bonds into equity securities. -A discount on bond payable is charged to interest expense using the effective interest method.
- A company issues Non-convertible bond with Equity Warrants. This security is equal to Preferred stock Call Option Convertible Bond Differential Voting Rights Equity sharesDebt securities acquired by a corporation which are accounted for by recognizing unrealized holding gains or losses and are included as other comprehensive income and as seperate components of stockholders' equity are:When holding held-to-maturity securities, a company should disclose at each balance sheet date the aggregate fair value of the securities. the gross unrecognized holding gains and losses. the amortized cost of the securities. all of these choices. 2. When holding available-for-sale securities, a company should disclose for each income statement period gross realized gains and losses as a separate component of other comprehensive income. unrealized gains and losses included in net income. proceeds from sales and the gross realized gains and losses on those sales. none of these choices.
