3) Proceeds from an issue of debt securities having stock warrants should NOT be allocated between debt and equity features when
A. the warrants issued with the debt securities are nondetachable.
B. exercise of the warrants within the next few fiscal periods seems remote.
C. the allocation would result in a discount on the debt security. D. the market value of the warrants is NOT readily available. 4) Total stockholders ‟ equity represents
A. only the amount of earnings that have been retained in the business.
B. the maximum amount that can be borrowed by the enterprise. C. a claim against a portion of the total assets of an enterprise. D. a claim to specific assets contributed by the owners.
5) When a corporation issues its capital stock in payment for services, the least appropriate basis for recording the transaction is the
A. Any of these provides an appropriate basis for recording the transaction.
B. par value of the shares issued. C. market value of the shares issued. D. market value of the services received. 6) A primary source of stockholders ‟ equity is
A. both income retained by the corporation and contributions by stockholders.