Question
BS Ltd. is a public corporation and issues $200,000 8% convertible three-year bonds for $224,000. Each $2,000 bond is convertible at the option of the
BS Ltd. is a public corporation and issues $200,000 8% convertible three-year bonds for $224,000. Each $2,000 bond is convertible at the option of the investor into 20 no-par value common shares of BS Ltd. on maturity. At the date of issue, similar type non-convertible bonds of BS Ltd. are selling for $204,000. The bond premium recorded on issue is:(2 marks)
A.$24,000
B.$20,000
C.$4,000
D.$0
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Financial Accounting Fundamentals
Authors: John J. Wild
5th edition
1308500102, 1308500106, 78025753, 978-0078025754
