On January 1 20x1 an entity issues bonds with face amount of P 5,000,000 for P 5,200,000.
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Question:
On January 1 20x1 an entity issues bonds with face amount of P 5,000,000 for P 5,200,000. The bonds mature on December 31, 20x3 and pay annual interest of 12%. The bonds can be converted into 10,000 ordinary shares of the entity with par value per share of P200. On January 1, 20x1, the bonds are selling at 101 without the conversion feature. The effective interest rate on the bonds is 11.59%. All of the bonds are converted into ordinary shares on January 1, 20x3.
Requirement:
A. On January 1 20x1 to record the issuance of the convertible bonds.
B. On January 1 20x3 to record the conversation of the bonds.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: