On December 1, 2020, Cairo Ltd. issued 500 of its 9%, $ 1,000 bonds at...
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On December 1, 2020, Cairo Ltd. issued 500 of its 9%, $ 1,000 bonds at 103. Attached to each bond was one detachable warrant entitling the holder to purchase ten of Cairo's common shares. At this time, the market value of the bonds, without the warrants, was 95, and the market value of each warrant was $ 50. Using the residual method, the amount of the proceeds from the issuance that should be credited to Bonds Payable would be (2mark)
$489,250
$515,000
$475,000
$500,000
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