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Intermediate Accounting

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On February 24, 2006, Bart Company purchased 2,000 shares of Winn Corporation’s newly issued 6% cumulative $75 par preferred stock for $152,000. Each share carried one detachable stock warrant entitling the holder to acquire at $10, one share of Winn no-par common stock. On February 25, 2006, the market price of the preferred stock was $72 a share and the market price of the stock warrants was $8 a warrant. On December 29, 2006, Bart sold all the stock warrants for $20,500. The gain on the sale of the stock warrants was:
a. $-0-
b. $ 500
c. $ 4,500
d. $ 5,300

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