Assume the same information in E16.1, except that Angela AG converts its convertible bonds on January 1,

Question:

Assume the same information in E16.1, except that Angela AG converts its convertible bonds on January 1, 2020.
Instructions
a. Compute the carrying value of the bond payable on January 1, 2020.
b. Prepare the journal entry to record the conversion on January 1, 2020.
c. Assume that the bonds were repurchased on January 1, 2020, for €1,940,000 cash instead of being converted. The of the liability component of the convertible bonds on January 1, 2020, is €1,900,000. Prepare the journal entry to record the repurchase on January 1, 2020.
Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...