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on january 1 , 2 0 0 5 , the knowshon moreno company issued 2 0 0 , 0 0 0 bonds, each bond with

on january 1,2005, the knowshon moreno company issued 200,000 bonds, each bond with a face value of $1,000. these moreno bonds sold for $187,000. each $1,000 bond comes with one detachable warrant to purchase one share of moreno common stock (par value) for $10. at the time the bonds and warrants were issued, each share of moreno's common stock was selling for $18. investment bankers estimate the value of each warrant to be $23. it is determined that the bonds, if sold without the warrants, would sell for $185,000

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