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On January 1, 2020, when the fair value of its common shares was $80 per share, Hammond Corp. issued $10 million of 8% convertible debentures due in 20 years. The conversion option allowed the holder...
See AnswerQ: Somerton Corporation had two issues of securities outstanding: common shares and
Somerton Corporation had two issues of securities outstanding: common shares and a 6% convertible bond issue in the face amount of $6 million. Interest payment dates of the bond issue are June 30 and...
See AnswerQ: On January 1, 2020, Olson Corporation issued $6 million
On January 1, 2020, Olson Corporation issued $6 million of 10-year, 7% convertible debentures at 104. Investment bankers believe that the debenture would have sold at 102 without the conversion privil...
See AnswerQ: Original Octave Inc. (OOI) is a widely held,
Original Octave Inc. (OOI) is a widely held, publicly traded company that designs equipment for tuning musical instruments. Information about its shareholders' equity is as follows. The preferred sha...
See AnswerQ: On September 1, 2020, Oxford Corp. sold at 102
On September 1, 2020, Oxford Corp. sold at 102 (plus accrued interest) 5,200 of its $1,000 face value, 10-year, 9% non-convertible bonds with detachable stock warrants. Each bond carried two detachabl...
See AnswerQ: On November 1, 2019, Aymar Corp. adopted a stock
On November 1, 2019, Aymar Corp. adopted a stock option plan that granted options to key executives to purchase 45,000 common shares. The options were granted on January 2, 2020, and were exercisable...
See AnswerQ: Refer to E16.2. Assume the same facts except that
Refer to E16.2. Assume the same facts except that the forward contract is a futures contract that trades on the Futures Exchange. On January 1, 2020, Roper is required to deposit $65 with the stockbro...
See AnswerQ: On January 2, 2020, Jackson Corporation purchased a call option
On January 2, 2020, Jackson Corporation purchased a call option for $500 on Walter's common shares. The call option gives Jackson the option to buy 1,000 shares of Walter at a strike price of $30 per...
See AnswerQ: On April 1, 2020, Petey Ltd. paid $175
On April 1, 2020, Petey Ltd. paid $175 for a call to buy 700 shares of NorthernTel at a strike price of $27 per share any time during the next six months. The market price of NorthernTel's shares was...
See AnswerQ: On January 1, 2020, Fresh Juice Ltd. entered into
On January 1, 2020, Fresh Juice Ltd. entered into a purchase commitment contract to buy 10,000 oranges from a local company at a price of $0.50 per orange any time during the next year. The contract p...
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