9 DOC INT ACCT QUIZ 1

# 9 DOC INT ACCT QUIZ 1 - 1 Question(TCO A On July 1 2010 an...

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1. Question: (TCO A) On July 1, 2010, an interest payment date, \$60,000 of Parks Co. bonds were converted into 1,200 shares of Parks Co. common stock, each having a par value of \$45 and a market value of \$54. There is \$2,400 unamortized discount on the bonds. Using the book value method, Parks would record Your Answer: no change in paid-in capital in excess of par. a \$3,600 increase in paid-in capital in excess of par. CORRECT a \$7,200 increase in paid-in capital in excess of par. a \$4,800 increase in paid-in capital in excess of par. Instructor Explanation: \$60,000 – (1,200 X \$45) – \$2,400 = \$3,600. Chapter 16. Points Received: 4 of 4 2. Question: (TCO A) On December 1, 2010, Lester Company issued at 103, two hundred of its 9%, \$1,000 bonds. Attached to each bond was one detachable stock warrant entitling the holder to purchase 10 shares of Lester's common stock. On December 1, 2010, the market value of the bonds, without the stock warrants, was 95, and the market value of each stock purchase warrant was

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9 DOC INT ACCT QUIZ 1 - 1 Question(TCO A On July 1 2010 an...

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