Cool Tech Co. issued 1,800 convertible bonds on January 1, 2019 at par. Each bond is redeemable
Fantastic news! We've Found the answer you've been seeking!
Question:
Cool Tech Co. issued 1,800 convertible bonds on January 1, 2019 at par. Each bond is redeemable in four years’ time at its par value of $1,000 per bond. Alternatively, each bond can be converted at the maturity date into 225 $1 shares. The bonds pay interest annually in arrears at an interest rate of 5%. The effective rate, adjusted for issue costs, is given at 8%.
Show the presentation of the compound instrument in the financial statement at inception, explaining your answer clearly. Round off your answers to nearest whole number.
Related Book For
Financial reporting, financial statement analysis and valuation a strategic perspective
ISBN: 978-0324789416
7th Edition
Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw
Posted Date: