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FINANCIAL ACCOUNTING
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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22. Refer to MC No. 21. What amount should be recognized as share premium from the issuance of the shares? * O a. 500,000 O b. 100,000 O c. 400,000 O d. 200,000
Transcribed Image Text:22. Refer to MC No. 21. What amount should be recognized as share premium from the issuance of the shares? * O a. 500,000 O b. 100,000 O c. 400,000 O d. 200,000
21. Seal Company is experiencing financial difficulty and is negotiating debt restructuring with its creditor to relieve its financial stress. Seal has a P2,500,00 note payable to United Bank. The bank accepted an equity interest in Seal Company in the form of 200,000 ordinary shares quoted at P12 per share. The par value is P10 per share. The fair value of the note payable on the date of restructuring is P2,200,000. What amount should be recognized as gain from debt extinguishment as a result of the "equity swap"? * a. 400,000 b. 100,000 c. 500,000 d. 200,000
Transcribed Image Text:21. Seal Company is experiencing financial difficulty and is negotiating debt restructuring with its creditor to relieve its financial stress. Seal has a P2,500,00 note payable to United Bank. The bank accepted an equity interest in Seal Company in the form of 200,000 ordinary shares quoted at P12 per share. The par value is P10 per share. The fair value of the note payable on the date of restructuring is P2,200,000. What amount should be recognized as gain from debt extinguishment as a result of the "equity swap"? * a. 400,000 b. 100,000 c. 500,000 d. 200,000
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