someone will answer Zackrampage, don't worry lol…
I hate it when the question trips me up for no reason, below is the answer:
ASC Subtopic 470-20 states that the proceeds of the bonds issued with detachable warrants are allocated between the bonds and the warrants based upon their relative FV at the time of issue. In this case, the portion allocated to the warrants is $10,000, calculated as follows: [$12,000 / ($108,000 + $12,000)] = 10% x $100,000 = $10,000. Therefore, the warrants are recorded at $10,000, and the bonds are recorded at $90,000.
BUT, the question says “immediately AFTER the issuance, the MV of Bonds 108K and warrants 12K”, which is confusing because the issuance was on 1/1 and they are asking for the amounts recorded for each at 1/1.
Florida:
AUD: 73, 81! Thank you Lord!
BEC: 73, 77! Thank you Lord! and WTB
REG: 71, 82! Thank you Lord! and A71
FAR: 72, 78! Thank you God and my Mommy in Heaven!
CPA Excel, Ninja Notes & Audio, Wiley Test Bank, CPAreviewforfree
.