At the beginning of current year, Case Company issued P5,000,000 of 12% nonconvertible bonds payable at 103 which are due in five years. In addition, each P1,000 bond was issued with 30 detachable share warrants, each of which entitled the bondholder to purchase, for P50, one ordinary share of Case Company, par value P25. On the date of issuance, the quoted market value of each warrant was P4. The market value of the bonds ex-warrants at the time of issuance is 95. 1. What is the carrying amount of the bonds payable on the date of issuance? a. 5,000,000 b. 4,750,000 c. 5,150,000 d. 4,550,000 2. What amount of the proceeds from the bond issue should be recognized as an increase in shareholders' equity? a. 600,000