Harrell's Barrels Issued $100 Million of 6% Convertible Bonds at 101

question 112

Multiple Choice

Harrell's Barrels issued $100 million of 6% convertible bonds at 101. Each $1,000 bond is convertible into 45 shares of Harrell's no par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 98.
-Harrell applies U.S. GAAP. Recording the issuance of the bonds would cause an increase in Harrell's:

• A) shareholders' equity of $1,000,000.
• B) shareholders' equity of $3,000,000.
• C) assets of $98,000,000.
• D) liabilities of $101,000,000.

---

Definitions:

Brainstem Structures

The lower part of the brain that connects the cerebrum with the spinal cord and controls basic life functions such as breathing.

Limbic System

A complex system of nerves and networks in the brain, associated with instincts, moods, and emotions.

Anterior Thalamus

A part of the thalamus located towards the front of the brain, playing a role in relaying sensory information and in the regulation of consciousness and sleep.

Medial Forebrain Bundle

A neural pathway in the brain that connects the brainstem to various structures in the forebrain, involved in the mediation of reward and pleasure.