During 2016, Royal Corporation issued at 105, two hundred of its 8%, P 1,000 bonds in ten years. One detachable stock warrant entitling the holder to buy 20 shares of Royal’s ordinary stock was attached to each bond. Shortly after the issuance, each bond had a market value of P940, and each warrant was quoted at P60. What amount, if any, of the proceeds from the bond issuance should be recorded as part of Royal’s shareholder’s equity?

During 2016, Royal Corporation issued at 105, two hundred of its 8%, P 1,000 bonds in ten years. One detachable stock warrant entitling the holder to buy 20 shares of Royal’s ordinary stock was attached to each bond. Shortly after the issuance, each bond had a market value of P940, and each warrant was quoted at P60. What amount, if any, of the proceeds from the bond issuance should be recorded as part of Royal’s shareholder’s equity?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EB: Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market...

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