assignment_4(Ch16) - INTERMEDIATE ACCOUNTING Assignment...

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INTERMEDIATE ACCOUNTING Assignment #4(CH16) Student name: Student ID: Please write your answer in each blank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 1. The conversion of bonds is most commonly recorded by the A. incremental method. B. proportional method. C. market value method. D. book value method. 2. The conversion of preferred stock into common requires that any excess of the par value of the common shares issued over the carrying amount of the preferred being converted should be A. reflected currently in income, but not as an extraordinary item. B. reflected currently in income as an extraordinary item. C. treated as a prior period adjustment. D. treated as a direct reduction of retained earnings. 3. Proceeds from an issue of debt securities having stock warrants should not be allocated between debt and equity features when A. the market value of the warrants is not readily available. B. exercise of the warrants within the next few fiscal periods seems remote. C. the allocation would result in a discount on the debt security. D. the warrants issued with the debt securities are nondetachable. 4. The major difference between convertible debt and stock warrants is that upon exercise of the warrants A. the stock is held by the company for a defined period of time before they are issued to the warrant holder. B. the holder has to pay a certain amount of cash to obtain the shares. C. the stock involved is restricted and can only be sold by the recipient after a set period of time. D. no paid-in capital in excess of par can be a part of the transaction.
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5. The date on which to measure the compensation element in a stock option granted to a corporate employee ordinarily is the date on which the employee A. is granted the option. B.
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This note was uploaded on 03/29/2010 for the course FINANCE 0011100110 taught by Professor Shentingchun during the Spring '10 term at Nashville State Community College.

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assignment_4(Ch16) - INTERMEDIATE ACCOUNTING Assignment...

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