4. On January 1, 20x1, Patience Co. issued 10%, 3-year,P2,000,000 convertible bonds at 105. Each P1,000 bond isconvertible into 8 shares with par value per share of P100.Principal is due on December 31, 20x3, while interest is due annually every year-end. On issuance date, the bonds wereselling at a yield to maturity market rate of 12% without theconversion option. All the bonds were converted into equityon December 31, 20x2. Patience Co. incurred stock issuancecosts of P20,000.Requirement: Provide all the journal entries in 20x1 and 20x2.

A journal entry is used to record a commercial transaction in the accounting records of a…

1SS 4. On January 1, 20x1, Patience Co. P2,000,000 convertible bonds at 105. Each P1,000 bond is convertible into 8 shares with par value per share of P100. Principal is due on December 31, 20x3, while interest is due

1SS 4. On January 1, 20x1, Patience Co. P2,000,000 convertible bonds at 105. Each P1,000 bond is convertible into 8 shares with par value per share of P100. Principal is due on December 31, 20x3, while interest is due

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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Question

4. On January 1, 20x1, Patience Co. issued 10%, 3-year,
P2,000,000 convertible bonds at 105. Each P1,000 bond is
convertible into 8 shares with par value per share of P100.
Principal is due on December 31, 20x3, while interest is due

annually every year-end. On issuance date, the bonds were
selling at a yield to maturity market rate of 12% without the
conversion option. All the bonds were converted into equity
on December 31, 20x2. Patience Co. incurred stock issuance
costs of P20,000.
Requirement: Provide all the journal entries in 20x1 and 20x2.

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