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Multiple Choice Question 59

On May 1, 2018, Marly Co. issued $2,500,000 of 7% bonds at 103, which are due on April 30, 2028. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Marlys common stock, $15 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2018, the fair value of Marlys common stock was $35 per share and of the warrants was $2. On May 1, 2018, Marly should record the bonds with a

discount of $28,000.

premium of $75,000.

discount of $25,000.

discount of $100,000.