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Taya2010 [7]
3 years ago
7

On April 1, 2021, Austere Corporation issued $330,000 of 11% bonds at 106. Each $1,000 bond was sold with 30 detachable stock wa

rrants, each permitting the investor to purchase one share of common stock for $16. On that date, the market value of the common stock was $13 per share and the market value of each warrant was $3. Austere should record what amount of the proceeds from the bond issue as an increase in liabilities
Business
1 answer:
blondinia [14]3 years ago
7 0

Answer:

Austere Corporation

The amount of the proceeds from the bond that should be recorded as an increase in liabilities is:

= $320,100.

Explanation:

a) Data and Calculations:

The bonds issued = $330,000 at 106

Number of $1,000 bonds issued = 330 ($330,000/$1,000)

Market value of each warrant = $3

Proceeds from issue of bond = $330,000*106% = $349,800

Fair value of warrant issued = 330*30*$3 = $29,700

The bond issue liability = $349,800 - $29,700 = $320,100

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2 years ago
Which of the following statements is not a difference between business markets and consumer​ markets?A. Buyers face more compl
marusya05 [52]

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E : the market is very small and limited

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4 years ago
Some of the world's most memorable advertising campaigns have achieved success because they originate from an idea that is so bi
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4 years ago
If bonds are issued at a premium, the stated interest rate is a.higher than the market rate of interest b.too low to attract inv
worty [1.4K]

Answer:

a.higher than the market rate of interest

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If bonds are issued at a premium, the stated interest rate is <u>higher than the market rate of interest.</u>

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