A Corporation Issues Bonds with Detachable Warrants

question 135

Multiple Choice

A corporation issues bonds with detachable warrants. The amount to be recorded as paid-in capital is preferably

• A) zero.
• B) calculated by the excess of the proceeds over the face amount of the bonds.
• C) equal to the market value of the warrants.
• D) based on the relative market values of the two securities involved.

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Definitions:

Holographic Wills

Handwritten wills made by the testator, generally without formal witnessing, that may be legally binding in some jurisdictions.

Nuncupative Wills

Verbal wills made by a person in anticipation of imminent death, and witnessed by others, typically needing to meet specific legal standards to be valid.

Witnesses

Individuals who have directly seen an event, such as a crime or a transaction, and can provide a first-hand account of it.

Statute of Frauds

A legal principle requiring certain contracts to be in writing and signed by all parties involved to be enforceable, typically including contracts for the sale of land, long-term contracts, and contracts for goods over a certain value.