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Determine the bond premium recorded on issue

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Question - BS Ltd. is a public corporation and issues $200,000 8% convertible three-year bonds for $224,000. Each $2,000 bond is convertible at the option of the investor into 20 no-par value common shares of BS Ltd. on maturity. At the date of issue, similar type non-convertible bonds of BS Ltd. are selling for $204,000. Determine the bond premium recorded on issue?

A. $24,000

B. $20,000

C. $4,000

D. $0

Reference no: EM132866427

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