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Air Supply issued $6 million of 9%, 10-year convertible bonds at 101. The bonds are convertible in to 24,000 shares of common stock. Bonds that
Air Supply issued $6 million of 9%, 10-year convertible bonds at 101. The bonds are convertible in to 24,000 shares of common stock. Bonds that are similar in all aspects except that they are non convertible. Currently are selling at 99 (that is 99% of face amount). What amount should Air Supply record as equity and how much as a liability when the bonds are issued?
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