1 On December 31 2016 Moss Co issued 1 000 000 of

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1. On December 31, 2016, Moss Co. issued $1,000,000 of 11% bonds at 109. Each $1,000
bond was issued with 50 detachable stock warrants, each of which entitled the bondholder to
purchase one share of $5 par common stock for $25. Immediately after issuance, the market
value of each warrant was $4. On December 31, 2016, what amount should Moss record as
discount or premium on issuance of bonds?(a) $40,000 premium(b) $90,000 premium(c)
$110,000 discount(d) $200,000 discount2. On July 31, 2016, Dome Co. issued $1,000,000 of
10%, 15-year bonds at par and used a portion of the proceeds to call its 600 outstanding 11%,
$1,000 face value bonds, due on July 31, 2024, at 102. On that date, unamortized bond
premium relating to the 11% bonds was $65,000. In its 2016 income statement, what amount
should Dome report as gain or loss, before income taxes, from retirement of bonds?(a) $53,000
gain(b) $0(c) ($65,000) loss(d) ($75,000) lossView Solution:
1 On December 31 2016 Moss Co issued 1 000 000 of

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