On January 1, 2020, a corporation issued 3,000 P1,000 10% 7-year bonds at 110. Interest is payable
Question:
On January 1, 2020, a corporation issued 3,000 P1,000 10% 7-year bonds at 110. Interest is payable annually every December 31. As of this date, the prevailing market rate of interest for similar bonds is 12%.
Each P1,000 bond comes with 20 non detachable share warrants, which allows the bondholder to purchase, for each warrant, 2 ordinary shares having a par value of P15, for P20.
Effective interest rate of bonds without share warrants is 11%, while the share warrants can be sold for P10 each.
Determine the increase in share premium issuance if 40% of the share warrants were exercised on December 31, 2021. Round present value factors to four decimal points.
Group of answer choices
416,496
214,800
240,000
774,656
At what amount should the total current liabilities be shown?
Group of answer choices
335,250
372,750
365,250
354,750
Expert Answer:
