A is corrent. ASC Topic 470 states that the proceeds from the issuance of debt with detachable stock warrants should be allocated between the debt and equity components. This is usually done by allocating the proceeds based on the relative fair market value of each security. However, in a case where only the value of the warrants is known, the warrants are recorded at their fair market value, and the remaining difference between proceeds and the value of the warrants is allocated to the bonds.
B is incorrect. ASC Topic 470 states that the proceeds from the issuance of debt with detachable stock warrants should be allocated between the debt and equity components. This is usually done by allocating the proceeds based on the relative fair market value of each security. However, in a case where only the value of the warrants is known, the warrants are recorded at their fair market value, and the remaining difference between proceeds and the value of the warrants is allocated to the bonds.
B is incorrect. ASC Topic 470 states that the proceeds from the issuance of debt with detachable stock warrants should be allocated between the debt and equity components. This is usually done by allocating the proceeds based on the relative fair market value of each security. However, in a case where only the value of the warrants is known, the warrants are recorded at their fair market value, and the remaining difference between proceeds and the value of the warrants is allocated to the bonds.
D is incorrect. ASC Topic 470 states that the proceeds from the issuance of debt with detachable stock warrants should be allocated between the debt and equity components. This is usually done by allocating the proceeds based on the relative fair market value of each security. However, in a case where only the value of the warrants is known, the warrants are recorded at their fair market value, and the remaining difference between proceeds and the value of the warrants is allocated to the bonds.
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