On December 1, 2020, Cairo Ltd

question 10

Multiple Choice

On December 1, 2020, Cairo Ltd. issued 500 of its 9%, $ 1,000 bonds at 103. Attached to each bond was one detachable warrant entitling the holder to purchase ten of Cairo's common shares. At this time, the market value of the bonds, without the warrants, was 95, and the market value of each warrant was $ 50. Using the residual method, the amount of the proceeds from the issuance that should be credited to Bonds Payable would be

• A) $ 475,000.
• B) $ 489,250.
• C) $ 500,000.
• D) $ 515,000.

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Definitions:

Miscarriage

The spontaneous loss of a pregnancy before the fetus can survive outside the womb, typically before 20 weeks of gestation.

Prematurity

The condition of being born before the completion of 37 weeks of gestation, often leading to health challenges for the infant.

Strange Situation

A research method developed by psychologist Mary Ainsworth to assess attachment relationships between a caregiver and a child.

Mary Ainsworth

A developmental psychologist known for her work in early emotional attachment with the "Strange Situation" assessment.