How should the value of warrants attached to a debt security be account for?
A) No value assigned
B) A separate portion of paid-in capital
C) An appropriation of retained earnings
D) A liability

Question

Quizplus · Accepted Answer

Warrants attached to a debt security are typically accounted for as a separate portion of paid-in capital because they represent a potential claim on the company's equity, not a direct claim on its assets or earnings like a liability or an appropriation of retained earnings would.

How Should the Value of Warrants Attached to a Debt