6. Vernon Corporation offered detachable 5-year warrants to buy one ordinary share (par value 5) at 20 (at a time when the shares were selling for 32). The price paid for 2,000, 1,000 bonds with the warrants attached was 205,000. The market price of the Vernon bonds without the warrants was 180,000, and the market price of the warrants without the bonds was 20,000. What amount should be allocated to the warrants?

a.20,000

b.25,000

c.24,000

d.20,500

7. On December 31, 2018, Gonzalez Company granted some of its executives options to purchase 100,000 shares of the company's 10 par ordinary shares at an option price of 50 per share. The Black-Scholes option pricing model determines total compensation expense to be 750,000. The options become exercisable on January 1, 2019, and represent compensation for executives' services over a three-year period beginning January 1, 2019. At December 31, 2019 none of the executives had exercised their options. What is the impact on Gonzalez's net income for the year ended December 31, 2019 as a result of this transaction under the fair value method?

a.250,000 increase.

b.750,000 decrease.

c.250,000 decrease.

d.0.