59. On May 1, 2025, Marly Co. issued $2,500,000 of 7% bonds at 103. The bonds are due on April 30, 2031. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Marly's $15 par value common stock were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2025, the fair value of Marly's common stock was $35 per share and of the warrants was $2. On May 1, 2025, Marly will record a a. discount of $100,000. b. discount of $25,000. c. discount of $28,000. d. premium of $75,000. Ans: C, LO: 2, Bloom: AP, Difficulty: Moderate, Min: 4, AACSB: Knowledge, AICPA BC: None, AICPA AC: Measurement, Interpretation and Analysis, AICPA PC: None, IMA: Reporting and Control: Financial Recordkeeping, IFRS: None Solution: ($2,500,000 x .96)+(2,500 x 20 x $2) = $2,500,000; ($2,400,000+ $2,500,000) x ($2,500,000 1.03) = $2,472,000; $2,500,000 - $2,472,000 = $28,000 Discount.