INTERMEDIATE ACC.

1.

An entity issued 5,000 convertible bonds with P1,000 face amount per bond. The bonds mature in three years and are issued at 110. Interest is payable annually every Dec 31 at a nominal 6% interest rate. Each bond is convertible at anytime up to maturity into 100 shares with par value of P5. It is reliably determined that the bonds would sell only at P4,600,000 without the conversion privilege. What is the equity component of the original issuance of the convertible bonds? Select the correct response: O 500,000 400,000 O 700,000 O 900,000On January 1, 2019, Pogee Co. acquired inventory with a list price of P1,300,000 and a cash price price of P994,760 by issuing P1,200,000, non-interest bearing note payable. Principal is due in three equal payments every December 31 beginning on Dec 31, 2019. The effective interest rate interpolated for the cash price is 10%. How much is the carrying amount of the note on initial recognition? Select the correct response: O 1,200,000 O 1,300,000 O 994,760 O 205,240On January 1, 2019, Je Corp. acquired a machine from Xel Co. In lieu of cash payments, Je gave Xel a 3-year, 1,200,000 noninterest-bearing note payable due December 31, 2021. The prevailing rate of interest for this type of note is 12%. How much is the carrying amount of the note on December 31, 2019? Select the correct response: O 800,000 O 956,659 O 1,200,000 O 1,071,458On August 1, 2018, Butuan Corp's P2,000,000, one year non-interest bearing note due July 31, 2019, was discounted at Munda Bank at 10.8%. Butuan uses the straight line method of amortizing discount. What amount should Butuan report for notes payable in its December 31, 2018 Statement of financial position? Select the correct response: 1,874,000 O 2,000,000 O 1,910,000 O 1,200,000