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During 2010, Gordon Company issued three hundred $1,000 bonds at104 (due in 10 years). One detachable stock warrant entitling theholder to purchase 15 shares of Gordon's common stock was attachedto each bond. At the date of issuance, the market value of thebonds, without the stock warrants, was quoted at 96. The marketvalue of each detachable warrant was quoted at $40. What amount, ifany, of the proceeds from the issuance should be accounted for aspart of Gordon's stockholders' equity?
(Points : 4)

$0

$12,000

$12,480

$11,856

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Casey Durgan
Casey DurganLv2
29 Sep 2019

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On March 1, 2018, Ron Corporation issued $150,000 of 8%nonconvertible bonds with detachable stock warrants at 104, whichare due on February 28, 2038. Each $1,000 bond was issued with 25detachable stock warrants, each of which entitled the bondholder topurchase for $50 one share of Ron common stock, par value $10. Thebonds without the warrants would normally sell at 96. On March 1,2018, the fair value of Ron’s common stock was $40 per share andthe market value of the warrants was $3.00 per warrant. What amountshould Ron record on March 1, 2018 as paid-in capital from stockwarrants?

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no change in paid-incapital in excess of par.
a $3,600 increase in paid-incapital in excess of par.
a $7,200 increase in paid-incapital in excess of par.
a $4,800 increase in paid-incapital in excess of par.


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(Points : 5)

$28,800

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January1 $30 per share
September1 $36 per share
December1 $40 per share

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$1,000.

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$450.

$0.

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$2.22.
$1.94.
$1.67.
$1.11.

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