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please show calculations and explanation On January 2, 2019, Farr Co. issued a $1,000 face-value convertible bond at 105. The fair value for the debt
please show calculations and explanation
On January 2, 2019, Farr Co. issued a $1,000 face-value convertible bond at 105. The fair value for the debt feature is $1,020 and for the conversion feature is $30. Farr should allocate the convertible bond proceeds to debt (bond feature) and equity (conversion feature) as
a. Debt $1000 and Equity $50.
b. Debt $0 and Equity $1050.
c. Debt $1020 and Equity $30.
d. Debt $1050 and Equity $0.
e. Debt $105 and Equity $0.
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