18.

On March 1, 2016, E Corp. issued $1,500,000 of 9% nonconvertible bonds at 107, due on February 28, 2026. Each $1,000 bond was issued with 45 detachable stock warrants, each of which entitled the holder to purchase, for $70, one share of Evan's $40 par common stock. On March 1, 2016, the market price of each warrant was $7. By what amount should the bond issue proceeds increase shareholders' equity?

a) $0

b) $484,500

c) $105,000

d) $472,500

20. On January 1, 2011, F Corp. issued 2,900 of its 10%, $1,000 bonds for $2,994,000. These bonds were to mature on January 1, 2021, but were callable at 101 any time after December 31, 2014. Interest was payable semiannually on July 1 and January 1. On July 1, 2016, F called all of the bonds and retired them. The bond premium was amortized on a straight-line basis. Before income taxes, F Corp.'s gain or loss in 2016 on this early extinguishment of debt was:

a) $22,700 gain

b) $29,000 loss

c) $13,300 gain

d) $76,000 gain