On December 30, year 1, Wayne Corporation issued 1,000 of its 8%, 10- year, $ 1,000 face
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On December 30, year 1, Wayne Corporation issued 1,000 of its 8%, 10- year, $ 1,000 face value bonds with detachable stock purchase warrants at par. Each bond carried a detachable warrant for one share of Wayne’s common stock at a specified option price of $ 25 per share. Immediately after issuance, the market value of the warrants was $ 120 per warrant. In its December 31, year 1, balance sheet, what amount should Wayne report as the book value of bonds payable?
a. $ 880,000
b. $ 900,000
c. $ 1,000,000
d. $ 1,120,000
Common StockCommon stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
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Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
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