Use the following information for questions 55-56.
On May 1, 2020, Wong Ltd. issued $ 500,000, 10 year, 7% bonds at 103. Twenty detachable warrants were attached to each $ 1,000 bond, which entitled the holder to purchase one of Wong's no par value common shares for $ 40. At this time, similar bonds without warrants were selling at 96. It was determined that the fair value of Wong's common shares was $ 35, but the value of the warrants was NOT determinable. Wong is a private corporation that follows ASPE, but does NOT use the residual method.
-On May 1, 2020, Wong should credit Bonds Payable for
A) $ 515,000.
B) $ 500,000.
C) $ 480,000.
D) cannot be determined from the information given.

Question

Quizplus · Accepted Answer

The bonds were issued at 103, which means the company received $ 515,000 ($ 500,000 x 103%).

Use the Following Information for Questions 55-56