1 20 million 6% convertibl ecember 2019, the holder convert the notes into ord e converted into 50 ordina

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Accounting
Goodview Berhad issued RM 20 million 6% convertible loan notes on 1 January
2017. Upon maturity on 31 December 2019, the holders of the loan notes have
the option to accept cash or convert the notes into ordinary shares at the term
of RM 100 loan notes can be converted into 50 ordinary shares. The market
interest rate for the year 2017 was 10%. Required: In accordance with MERS 9:
Financial Instruments:
a) Determine the loan amount over its maturity period.
b) Determine the relevant journal entries in the book of the company over the
maturity period of the loan notes.
Transcribed Image Text:Accounting Goodview Berhad issued RM 20 million 6% convertible loan notes on 1 January 2017. Upon maturity on 31 December 2019, the holders of the loan notes have the option to accept cash or convert the notes into ordinary shares at the term of RM 100 loan notes can be converted into 50 ordinary shares. The market interest rate for the year 2017 was 10%. Required: In accordance with MERS 9: Financial Instruments: a) Determine the loan amount over its maturity period. b) Determine the relevant journal entries in the book of the company over the maturity period of the loan notes.
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