On July 1, 2020, Salem Corporation issued $2,000,000, 10-year, 7% bonds at 100. Each $1,000 bond includes a detachable stock purchase warrant. Each warrant gives the bondholder the right to purchase, for $30, one share of $1 par value common stock at any time during the next 10 years. The value of the stock purchase rights at the time of issuance was $500,000. The bonds would sell without warrants at $2.000,000.

The detachable stock warrants should be recorded at

A. $600.000.

B. $500,000.

C. $400,000.

D. $0.