Use the Following Information for Questions 55-56

question 91

Multiple Choice

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 Contributed Surplus-Stock Warrants for

• A) $ 35,000.
• B) $ 20,000.
• C) $ 15,000.
• D) $ 0.

---

Definitions:

Product Liability Theories

Legal doctrines that hold manufacturers, distributors, suppliers, retailers, and others who make products available to the public responsible for the injuries those products cause.

Load-Carrying Capacity

The maximum weight that a structure or vehicle can safely carry or support.

Implied Warranty

A legal concept that guarantees certain conditions or features are present in a product or service, even if not explicitly stated.

Operation of Law

Changes in legal rights or obligations that occur automatically due to established laws, rather than the actions or agreements of individuals.