Cobra Corp. issued 2,000 convertible bonds on January 1, 2020, which mature on December 31, 2024. Each
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Cobra Corp. issued 2,000 convertible bonds on January 1, 2020, which mature on December 31, 2024. Each $1,000 bond is convertible into 2 common shares at the option of the investor. The bonds have a stated rate of 8%, payable semi-annually on June 30 and Dec 31, and were issued at an effective rate of 6%.
Similar bonds, without the conversion feature have an effective rate of 10%.
At the time of issuance, what amount of liability will Cobra record for this financial instrument?
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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