1. Pamela Company showed the following accounts on December 31, 2020. Bonds Payable 5,000,000 Premium on Bonds Payable 250,000 Share capital- 250,000 shares authorized and 200,000 shares issued, P50 par 10,000,000 Share premium- issuance 2,000,000 Share premium-conversion privilege 500,000 Retained earnings 2,500,000 The bonds are convertible into 10 shares of capital for every P 1,000 bond. On December 31, 2020, the entire bond issue was converted and on this date, the market value of the share is 120 and the market value of the bonds is 103. The entity paid P 200,000 as a result of the bond conversion. Required: Prepare journal entries for the conversion of the bonds on December 31, 2020

1. Pamela Company showed the following accounts on December 31, 2020. Bonds Payable 5,000,000 Premium on Bonds Payable 250,000 Share capital- 250,000 shares authorized and 200,000 shares issued, P50 par 10,000,000 Share premium- issuance 2,000,000 Share premium-conversion privilege 500,000 Retained earnings 2,500,000 The bonds are convertible into 10 shares of capital for every P 1,000 bond. On December 31, 2020, the entire bond issue was converted and on this date, the market value of the share is 120 and the market value of the bonds is 103. The entity paid P 200,000 as a result of the bond conversion. Required: Prepare journal entries for the conversion of the bonds on December 31, 2020

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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D1.
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