CASE 2 On January 1, 2020, DEP Co. issues convertible bonds with a maturity of five years. The issue is for a total of 1,000 convertible bonds. Each bond has a par value of P1,000, a stated interest rate of 5% per year, and is convertible into 5 ordinary shares of DEP. The convertible bonds were issued to DEP at par. The per-share price of DEP's share P15. Quotation for similar bonds issued by DEP without the conversion privilege suggest that they can be sold for P900,000 .

1. The issuance of convertible bonds increased DEP's equity by

a. 100,000

b. 75,000

c. 76,923

d. zero

2. The carrying amount of bonds payable on DEP's books as of December 31, 2020 is