(AICPA Adapted) M the beginning of the eurrent vear, Ceve Compan, donely-held entity, iaued ON bonde with a maturity value P6.000.000, together with 10.000 rinary shares of P50 par value, for a combined caah amount of PIL000.000. Probiem If insed separately, the bende would have old for P4000.000 on an 8% yield to maturity besia 1 What amount of the proceeds ahould be allocated to the ordinary shares 4,000,000 A 7,000,000 8,000,000 d. 5,000.000 2 What amount should be reported for share premium on the issuance of the ordinary shares? 7,500.000 6,500,000 e 5,500,000 4.300.000
(AICPA Adapted) M the beginning of the eurrent vear, Ceve Compan, donely-held entity, iaued ON bonde with a maturity value P6.000.000, together with 10.000 rinary shares of P50 par value, for a combined caah amount of PIL000.000. Probiem If insed separately, the bende would have old for P4000.000 on an 8% yield to maturity besia 1 What amount of the proceeds ahould be allocated to the ordinary shares 4,000,000 A 7,000,000 8,000,000 d. 5,000.000 2 What amount should be reported for share premium on the issuance of the ordinary shares? 7,500.000 6,500,000 e 5,500,000 4.300.000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Problem 12
![Problem 20-12 (AICPA Adapted)
At the beginning of the current year, Cove Company,
doely-held entity, issued ON bonda with a maturity value
of P6,000,000, together with 10,000 ordinary shares of P50
par value, for a combined eash amount of PIL.000.000.
If iasued separately, the bonda would have sold for
P4,000,000 on an 8% yield to maturity basia
1 What amount of the proceeda should be allocated to
the ordinary shares?
a. 4.000,000
b. 7,000,000
8,000,000
d. 5,000,000
2 What amount should be reported for share premium
on the issuance of the ordinary sharee?
A 7,600,000
b6,500,000
e. 5,500,000
d. 4.300,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3beaf3c4-fdba-44c5-89f4-0431c53fb453%2F6e4642c2-0176-4989-91eb-f5250715dd02%2F1nr85s_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 20-12 (AICPA Adapted)
At the beginning of the current year, Cove Company,
doely-held entity, issued ON bonda with a maturity value
of P6,000,000, together with 10,000 ordinary shares of P50
par value, for a combined eash amount of PIL.000.000.
If iasued separately, the bonda would have sold for
P4,000,000 on an 8% yield to maturity basia
1 What amount of the proceeda should be allocated to
the ordinary shares?
a. 4.000,000
b. 7,000,000
8,000,000
d. 5,000,000
2 What amount should be reported for share premium
on the issuance of the ordinary sharee?
A 7,600,000
b6,500,000
e. 5,500,000
d. 4.300,000
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education