Problem:
On April 1, 2013, Austere Corporation issued $380,000 of 10% bonds at 107. Each $1,000 bond was sold with 20 detachable stock warrants, each permitting the investor to purchase one share of common stock for $16. On that date, the market value of the common stock was $13 per share and the market value of each warrant was $3.
Required:
Question: Austere should record what amount of the proceeds from the bond issue as an increase in liabilities?
- $509,100
- $383,800
- $308,300
- $0
Note: Solve the problem and show all work.