How Would Exercise of Warrants That Were Part of an Original

question 19

Multiple Choice

How would exercise of warrants that were part of an original compound instrument be recorded?

• A)Common stock is recorded at an amount equal to the fair value of the options at date of conversion.
• B)Common stock is recorded at an amount equal to the cash received plus the contributed surplus initially recorded.
• C)Common stock is recorded at an amount equal to the market price of the shares on conversion date.
• D)Common stock is recorded at an amount equal to the price determined by the Black-Sholes model.