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On May 1, 2010, Payne Co. issued $300,000 of 7% bonds at 103, which are due on April 30, 2020. Twenty detachable stock warrants entitling
On May 1, 2010, Payne Co. issued $300,000 of 7% bonds at 103, which are due on April 30, 2020. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Paynes common stock, $15 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2010, the fair value of Paynes common stock was $35 per share and of the warrants was $2. 7. On May 1, 2010, Payne should credit Paid-in Capital from Stock Warrants for a. $11,520. b. $12,000. c. $12,360. d. $21,000. 8. On May 1, 2010, Payne should record the bonds with a a. discount of $12,000. b. discount of $3,360. c. discount of $3,000. d. premium of $9,000
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