Accounting for Detachable Stock Warrants: Proceeds Allocation to Stockholders' Equity

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 calculate the fair value of the detachable warrants and then multiply it by the number of warrants issued.

The fair value of the detachable warrants can be determined by subtracting the fair value of the bonds without warrants from the total proceeds from the issuance.

Proceeds from the issuance = Face value of bonds * Issue price percentage = $560,000 * 105% = $588,000

Fair value of the bonds without warrants = Proceeds from the issuance - (Number of warrants * Fair value of warrants) = $588,000 - (560 * $40) = $566,800

Fair value of the detachable warrants = Proceeds from the issuance - Fair value of the bonds without warrants = $588,000 - $566,800 = $21,200

Therefore, $21,200 of the proceeds from the issuance should be accounted for as part of Crane's stockholders' equity. The correct answer is not provided in the given options, and none of the options match the calculated amount.