COMPOUND FINANCIAL INSTRUMENTS On January 1, 2023, ACT Company issued 1,000 of its 10%, 5-year, P 5,000 face value convertible bonds at 110. Each P 5,000 bond is convertible into 10 shares of P 100 par value ordinary shares on the date of maturity. Without the conversion feature, the bonds can be sold at 105. 3. What if there are expenditures incurred related to the conversion? Expenditures paid related to the conversion was P 10,000. 4. What if the bonds are retired before maturity? The P 5,000,000 bonds were retired at 103, and without the conversion privilege, these bonds would have been sold at this date at 101. Provide the journal entries for each problems and assumptions.
COMPOUND FINANCIAL INSTRUMENTS On January 1, 2023, ACT Company issued 1,000 of its 10%, 5-year, P 5,000 face value convertible bonds at 110. Each P 5,000 bond is convertible into 10 shares of P 100 par value ordinary shares on the date of maturity. Without the conversion feature, the bonds can be sold at 105. 3. What if there are expenditures incurred related to the conversion? Expenditures paid related to the conversion was P 10,000. 4. What if the bonds are retired before maturity? The P 5,000,000 bonds were retired at 103, and without the conversion privilege, these bonds would have been sold at this date at 101. Provide the journal entries for each problems and assumptions.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 21E: On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be...
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COMPOUND FINANCIAL INSTRUMENTS
On January 1, 2023, ACT Company issued 1,000 of its 10%, 5-year, P 5,000 face
3. What if there are expenditures incurred related to the conversion? Expenditures paid related to the conversion was P 10,000.
4. What if the bonds are retired before maturity? The P 5,000,000 bonds were retired at 103, and without the conversion privilege, these bonds would have been sold at this date at 101.
Provide the
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