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If possible please show work/explain the answer a little, thanks Linus Corp. issues $500,000 of 6%, 5-year bonds with nondetachable stock warrants on January 1,
If possible please show work/explain the answer a little, thanks
Linus Corp. issues $500,000 of 6%, 5-year bonds with nondetachable stock warrants on January 1, 2020. Each $1,000 bond carries 5 warrants. Each warrant entitles the holder to purchase one share of $1 par common stock for $12. Assume the bond issue sells for 102. Management estimates that the bonds would sell for $500,000 if the warrants were not attached. Upon issuance, Linus Corp. would record a credit to Paid-in CapitalStock Warrants for the following amount: O A) $-0- B) $2,000 O C) $5,000 D) $10,000 AmeriCo. reported total assets of $550,000 and total liabilities of $250,000 on December 31, 2020. AmeriCo's loan agreement with First National Bank requires AmeriCo to maintain a debt-to- equity ratio of no more than 0.90. What is AmeriCo's debt-to-equity ratio at year-end and is AmeriCo in compliance with its loan agreement? A) AmeriCo's debt-to-equity ratio is 0.45 and AmeriCo is in compliance with the loan agreement. B) AmeriCo's debt-to-equity ratio is 0.83 and AmeriCo is in compliance with the loan agreement. C) AmeriCo's debt-to-equity ratio is 1.0 and AmeriCo is in compliance with the loan agreement OD) AmeriCo's debt-to-equity ratio is 1.2 and AmeriCo is not in compliance with the loan agreementStep by Step Solution
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