19. Beach Company bad P600,000 convertible 8% bonds payable outstanding or June 30, 2011. Each P1,000 bond was convertible into 10 ordinary shares of P50 par value. On July 1, 2011, the interest was paid to bondholders, and the bonds were converted into ordinary shares, which had a fair value of P75 per share. The unamortized premium on these bonds was P12,000 at the date of conversion. No equity component was

19. Beach Company bad P600,000 convertible 8% bonds payable outstanding or June 30, 2011. Each P1,000 bond was convertible into 10 ordinary shares of P50 par value. On July 1, 2011, the interest was paid to bondholders, and the bonds were converted into ordinary shares, which had a fair value of P75 per share. The unamortized premium on these bonds was P12,000 at the date of conversion. No equity component was

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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Aloe Corp has outstanding 7%, 10-year, $2,000,000 face value bond. The bond was originally sold to yield at 6% annual interest. On June 30, 2010, the carrying amount ofthe outstanding bond was $2,100,000. What amount of unamortized premium on bond should Aloe report in its June 2011 statement of financial position? a.$86,000 b.$114,000 c.$126,000 d.$140,000
bonds are queted at 101. Problem 6-8 (IAA) Sunshine Company issued 4-year P5,000,000 face value of 12% convertible bonds at 105 on January 1, 2013, maturing on January 1, 2018 and paying interest annually on December 31. It is reliably ascertained that the bonds would sell at P4,700,000 without the conversion feature with an effective yield of 14%. Eaclh P1,000 bond is convertible into 8 shares of P100 par value share capital, On December 31, 2013, all of the bonds are converted into share capital. At this time, the share has a market value of P150 and the Required: 1. Prepare journal entry to record the issuance of the bond on January 1, 2013. 2. Prepare journal entry to record the interest payment and amortization for 2013. The effective interest method of amortization is used. 3. Prepare journal entry to record the conversion of bonds on December 31, 2013.
N7. Account
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5. On January 1, 20x1, Kindness Co. issued 3-year, 10%, P2,000,000 convertible bonds for P2,200,000. Principal is due at maturity but interest is payable every year-end. The bonds are convertible into 6,000 ordinary shares with par value per share of P200. On issuance date, the prevailing market rate of interest for similar debt without a conversion feature was 12%. On December 31, 20x2, Kindness Co. retired all the bonds for P2,000,000. On retirement date, the current rate for similar debt instrument without a conversion feature was 11%. Requirement: Provide all the entries in 20x1 and 20x2.
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Looking for answer. Please include all calculations for my reference. Thanks!
Sh21
3. What is the equity component arising from the issuance of bonds payable? A. 450,000 B. 500,000 C. 620,000 D. 0 E. None of the above
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3. On April 30, one year before maturity, Romo Company retired $300,000 of its 8% bonds payable at the current market price of 102 (102% of the bond face amount, or $300,000 x 1.02 = $306,000). The bond book value on April 30 is $296,100, reflecting an unamortized discount of $3,900. Bondinterest is currently fully paid and recorded up to the date of retirement.What is the gain or loss on retirement of these bonds?a. $6,000 gainb. $9,900 lossc. $3,900 lossd. $3,900 gain 4. Which of the following liability-related accounts is not a balance sheet account?a. Gain on Bond Retirementb. Discount on Bonds Payablec. Mortgage Notes Payabled. Bonds Payable 6. Bushman, Inc., issues $400,000 of 8% bonds that pay interest semiannually and mature in 8 years.Compute the bond issue price assuming that the prevailing market rate of interest is 10% per yearcompounded semiannually.a. $356,648b. $400,000c. $381,293d. $436,172 7. Bushman, Inc., issues $400,000 of zero coupon bonds that mature in 8 years.…
20. On December 31, 2011, Cey Company had outstanding 10%,P1,000,000 face amount convertible bonds payable maturing on December 31, 2014. Interest is payable on June 30 and December 31. Each P1,000 bond is convertible into 50 shares of P10 par value. On December 31, 2011, the unamortized premium on bonds payable was P60,00O. On December 31, 2011, 400 bonds were converted when Cey's share had a market price of P24. Cey incurred P4,000 in connection with the conversion. No-equity component was recognized when the bonds were originally issued. What is the share premium from the issuance of shares as a result of the bond conversion on December 31, 2011? a. 176,000 b. 220,000 c. 276,000 d. 280,000