3. On January 1, 2020, ABC Corporation issued P3,000,000, 10%, nonconvertible bonds with detachable share purchase warrants. Each P1,000 bond carried 20 detachable share purchase warrants, each of which called for ½ a share of ABC ordinary share, par P60, at the specified option price of P80 per share. The bonds are sold at 110, and the detachable share purchase warrants were immediately quoted at P20 each on the market. The bond was dated January 1, 2020, and will mature on January 1, 2025. The quoted price of the bonds ex – warrant cannot be determined reliably however, the market interest rate of the nonconvertible bonds without the privilege at the time of issue is 12%. Interest payment shall be made every January 1. Assuming that the bondholder exercises entire share purchase warrants on December 31, 2023, determine the amount that shall be credited to the share premium account arising from the issuance of shares (upon exercising the option). (Use 4-decimal PVF and round off final answer to whole number)
3. On January 1, 2020, ABC Corporation issued P3,000,000, 10%, nonconvertible bonds with detachable share purchase warrants. Each P1,000 bond carried 20 detachable share purchase warrants, each of which called for ½ a share of ABC ordinary share, par P60, at the specified option price of P80 per share. The bonds are sold at 110, and the detachable share purchase warrants were immediately quoted at P20 each on the market. The bond was dated January 1, 2020, and will mature on January 1, 2025. The quoted price of the bonds ex – warrant cannot be determined reliably however, the market interest rate of the nonconvertible bonds without the privilege at the time of issue is 12%. Interest payment shall be made every January 1. Assuming that the bondholder exercises entire share purchase warrants on December 31, 2023, determine the amount that shall be credited to the share premium account arising from the issuance of shares (upon exercising the option). (Use 4-decimal PVF and round off final answer to whole number)
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