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On May 1, 2012 Payne Co. issued 500,000 of 7% bonds at 103, which are due April 30, 2022. Twenty detachable stock warrants entitling the
On May 1, 2012 Payne Co. issued 500,000 of 7% bonds at 103, which are due April 30, 2022. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Payne's common stock, $15 par value, were attached to each 1,000 dollar bond. The bonds without the warrants would sell at $96. On May 1, 2012, the fair value of Payne's common stock was $35 per share and of the warrants was $2. On MAy1, 2012, Payne should record bonds with a a. discount of 20,000 b. discount of 5,600 c. discount of 5,000 d. premium of 15,600 must show work
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