The proceeds from the sale of debt with detachable warrants should be allocated between the debt and the warrants.

Question

Quizplus · Accepted Answer

The proceeds from the sale of debt with detachable warrants should be allocated between the debt and the warrants based on their relative fair values at the time of issuance. This is because the warrants represent a separate component of the financial instrument that has value independent of the debt, and accounting standards require that each component be recognized and measured separately.

The Proceeds from the Sale of Debt with Detachable Warrants