Crane Company Bond Issuance: Stockholders' Equity Allocation

To determine the amount of the proceeds from the issuance that should be accounted for as part of Crane's stockholders' equity, we need to consider the market value of the bonds and the market value of the detachable warrants.

The market value of the bonds without the stock warrants is given as $95. Since each bond has a face value of $1,000, the total market value of the bonds without the stock warrants is calculated as:

Market value of bonds without stock warrants = Number of bonds * Market value per bond without stock warrants Market value of bonds without stock warrants = 560 * $95 = $53,200

The market value of each detachable warrant is given as $40. Since each bond has one detachable stock warrant entitling the holder to purchase 15 shares, the total market value of the detachable warrants is calculated as:

Market value of detachable warrants = Number of bonds * Number of warrants per bond * Market value per warrant Market value of detachable warrants = 560 * 15 * $40 = $336,000

The proceeds from the issuance of the bonds would be the sum of the market value of the bonds without the stock warrants and the market value of the detachable warrants:

Proceeds from issuance = Market value of bonds without stock warrants + Market value of detachable warrants Proceeds from issuance = $53,200 + $336,000 = $389,200

Therefore, the amount of the proceeds from the issuance that should be accounted for as part of Crane's stockholders' equity is $389,200.