Find what portion of proceed should be credited to ordinary

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Problem 1: Ribbon Company issued 10,000 of its 6% preference share; par P100, at P125 per share. Each share carried a detachable share warrant for one share of Ribbon's ordinary share, P40 par, at a specified option price of P50 per share. Immediately after issuance, the market value of Ribbon's preference share was P 1,140,000 and the warrants were P 60,000. What portion of the proceeds should be credited to ordinary share warrants outstanding?

a. None               c. P 62,500
b. P 60,000          d. P 190,000

Reference no: EM132745419

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