Problem #7: Allocation of Proceeds between Bond and Warrants

On December 1, 2020, Grey Company issued at 105, eight hundred fifty of its 9%, $1,000 bonds with the following detachable stock warrant attached to each bond. Each warrant entitles the holder to purchase 10 shares of Greys common stock.

On December 1, 2020, the market value of the bonds, without the stock warrants, was 93, and the market value of each stock purchase warrant was $55. Calculate the amount of the proceeds from the issuance that should be accounted for as the initial carrying value of the bonds and the warrants.