On March 1, 2021, Bonita Industries issued $2090000 of 8% nonconvertible bonds at 104, which are due
Question:
On March 1, 2021, Bonita Industries issued $2090000 of 8% nonconvertible bonds at 104, which are due on February 28, 2041. In addition, each $1000 bond was issued with 25 detachable stock warrants, each of which entitled the bondholder to purchase for $50 one share of Bonita common stock, par value $25. The bonds without the warrants would normally sell at 95. On March 1, 2021, the fair value of Bonita’s common stock was $40 per share and the fair value of the warrants was $2. What amount should Bonita record on March 1, 2021 as paid-in capital from stock warrants?
a. $89880
b.$104500
c.$78280
d.$108680
Accounting Principles Volume 1
ISBN: 978-1119502425
8th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak