Amounts allocated to the warrants and bonds


Schieble Corporation offered detachable 5-year warrants to buy one share of common stock (par value $2) at $30 (at a time when a share was selling for approximately $45). The price paid for 2,000, $1,000 bonds with the warrants attached was par, or $200,000. Assuming the market price of the Schieble bonds was known to be $180,000, but the market price of the warrants without the bonds cannot be determined, what are the amounts that should be allocated to the warrants and the bonds?

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Accounting Basics: Amounts allocated to the warrants and bonds
Reference No:- TGS046752

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