Litke Corporation issued at a premium of $5,000 a $100,000 bond issue convertible into 2,000...
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Accounting
Litke Corporation issued at a premium of $5,000 a $100,000 bond issue convertible into 2,000 ordinary shares (par value $40). At the time of the conversion, the unamortized premium is $2,000, the market value of the bonds is $110,000, and the shares are quoted on the market at $60 per share. If the bonds are converted ordinary shares, what is the amount of share premium to be recorded on the conversion of the bonds?
Select one:
a. $40,000
b. $22,000
c. $32,000
d. $25,000
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