Co B is the issuer of a tranche of mandatorily redeemable convertible preference shares (MRCPS) that was issued on the following terms:

Required
1. Identify the elements included in the MRCPS.
2. Prepare the amortization table from issue date to redemption.
3. Show the journal entries for the above issue in Co B’ s books for the year ended 31 December 20x6 in accordance with the principle in IAS 32 paragraph 28 and IAS 32 paragraph 29.
4. If 50% of the MRCPS was converted on 31 December 20x8, show the journal entries to effect the conversion.

Transcribed Image Text:

Date of issue. Issuer.. Notional amount. Issue price.. Coupon rate Payment of interest. Redemption date.. Prevailing interest rate on pure loan instruments issued by Co B: As at 1 July 20x6. Conversion ratio. 1 July 20x6 Co B $12,000,000 $12,500,000 2% per annum 31 December and 30 June of each year 30 June 20x11 3% per annum 1 ordinary share for each $1 notional amount of MRCPS