management estimated that Earl ' s services were worth $ 100,000 in cost savings to the company. As a result of this transaction, additional paid-in capital should increase by
Question 10
During 2005, Eddy Corp. incurred the following costs in connection with the issuance of bonds: What amount should be recorded as a deferred charge to be amortized over the term of the bonds?
Question 11
The primary purpose of a quasi-reorganization is to give a corporation the opportunity to
Question 12
Clay Corp. had $ 600,000 of convertible 8 % bonds outstanding at June 30, 2005. Each $ 1,000 bond was convertible into 10 shares of Clay ' s $ 50 par value common stock. On July 1, 2005, the interest was paid to bondholders and the bonds were converted into common stock, which had a fair market value of $ 75 per share. The unamortized premium on these bonds was $ 12,000 at the date of conversion. Under the book value method, this conversion increased the following elements of the stockholders ' equity section by
Question 13
On December 31, 2003, Moss Co. issued $ 1,000,000 of 11 % bonds at 109. Each $ 1,000 bond was issued with 50 detachable stock warrants, each of which entitled the bondholder to purchase one share of $ 5 par common stock for $ 25. Immediately after issuance, the market value of each warrant was $ 4. On December 31, 2003, what amount should Moss record as discount or premium on issuance of bonds?
Question 14