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Topic
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On July 28, Vent Corp. sold $500,000 of 4%, eight-year subordinated debentures for $450,000. The purchasers were issued 2,000 detachable warrants, each of which was for one share of $5 par common stock at $12 per share. Shortly after issuance, the warrants sold at a market price of $10 each. What amount of discount on the debentures should Vent record at issuance?
Why do they use the $10 to value the warrants? I would think $12 makes more sense. What did they do, record the entry but said “oh wait, a short period later, the market price is $10 so lets change the entry?”
AHHH I hate these bond questions!!!
BEC - PASSFAR - PASS
AUD - PASS
REG - PASS
BOOM! JUST LIKE THAT, I GOT MY LIFE BACK! =D
Using Becker self-study
FAR: (82) 175 hours - 1st attempt
BEC: (XX)
AUD: (69) 45hrs of study - 1st attempt
REG: (XX)
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