Question: Please help me with my assignment On January 1, 2017, Shredder Company issued its 10%, 4-year convertible debt instrument with a face amount of P3,000,000

Please help me with my assignment

On January 1, 2017, Shredder Company issued its 10%, 4-year convertible debt instrument with a face amount of P3,000,000 for P3,500,000. Interest is payable every December 31 of each year. The debt instrument is convertible into 30,000 ordinary shares with a par value of P100. The debt instrument is convertible into equity from the time of issue until maturity. When the debt instruments were issued, the prevailing market rate of interest for similar debt without conversion option is 18%.

PV of 8% for an ordinary annuity of P1 after 4 periods3.3121268

PV of 8% after 4 interest periods0.7350298

1. What is the carrying value of the compound instruments as of December 31, 2022?

2. What is the amount of interest expense should the company report in the Dec. 31, 2021 profit or loss?

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