When the Cash Proceeds from a Bond Issued with Detachable

question 152

Multiple Choice

When the cash proceeds from a bond issued with detachable stock warrants exceed the sum of the par value of the bonds and the fair market value of the warrants, the excess should be credited to

• A) additional paid-in capital from stock warrants.
• B) retained earnings.
• C) a liability account.
• D) premium on bonds payable.

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Definitions:

Cuticles

The thin layer of skin at the base of the nails on fingers and toes, protecting the nail matrix from infections.

Brittle

Having a hard but easily breakable texture or quality, often describing materials or substances.

Clubbing

A condition where the fingers and toes swell into a club-like shape, often indicating underlying health issues.

Vision

The faculty or state of being able to see with the eyes, or the perception of the environment and surroundings made possible by the process of sight.