The bonds without the warrants would sell at 96. on may 1, Ask an Expert

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On May 1, 2010, Payne Co. issued $300,000 of 7% bonds at 103, which are due on April 30, 2020. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Payne's common stock, $15 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2010, the fair value of Payne's common stock was $35 per share and of the warrants was $2.

On May 1, 2010, Payne should credit Paid-in Capital from Stock Warrants for:

$11,520.

$12,000.

$12,360.

$21,000.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M961155

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