On December 30, year 1, Wayne Corporation issued 1,000 of its 8%, 10- year, $ 1,000 face

Question:

On December 30, year 1, Wayne issued 1,000 of its 8%, 10- year, $ 1,000 bonds with detachable stock warrants at par. Each bond carried a detachable warrant for one share of Wayne’s at a specified option price of $ 25 per share. Immediately after issuance, the market value of the bonds without the warrants was $ 1,080,000 and the market value of the warrants was $ 120,000. In its December 31, year 1 balance sheet, what amount should Wayne report as bonds payable?
a. $ 1,080,000
b. $ 1,000,000
c. $ 900,000
d. $ 1,200,000 Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...