How much is the equity component of the compound instrument?
Q: On January 1, 2019, Maeve Company issued P6,000,000 of 12% bonds payable maturing in five years. The…
A: Market price of Bonds Payable P56,00,000 Market price of share warrants P8,00,000 Total market…
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A: Computation explanation for Liability Component:
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A: Record general journal for issuance of bonds as shown below:
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Q: What is the carrying amount of the bonds as of December 31, 2022?
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A: The carrying amount of a bond is the amount that is payable to the holder of the bond by the issuer…
Q: On December 31, 2022, For Company issued P6,000,000 of 12% bonds payable maturing in five years. The…
A:
Q: On January 1, 2019, Post Malone Company issued P6,000,000 of 12% bonds payable maturing in five…
A: Share warrant refers to the document which is issued through the company under the common seal and…
Q: On September 1, 2020, Splish Company sold at 104 (plus accrued interest) 5,760 of its 9%, 10-year,…
A: Formulas for the above table:
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A:
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A: Bonds are debt instruments that pay periodic interest and return the principal at maturity, while…
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Q: Show the computation please. On January 1, 2022, Dirk Corporation issued 1,000 of its January…
A: A Compound Financial Instrument is an instrument which exhibits the characteristics of both Equity…
Q: On January 1, 2016, Cooper Corporation issued $800,000 of 12.5% bonds due January 1, 2023, at 102.…
A: Bond might be issued at the discount or premium with the attached warrant to it and warrant holder…
Q: On September 1, 2025, Splish Company sold at 104 (plus accrued interest) 5,760 of its 9%, 10-year,…
A: The right, but not the duty, to purchase a certain quantity of a company's shares at a defined price…
Q: On March 1, 2021, E Corp. issued $1,000,000 of 10% nonconvertible bonds at 104, due on February 28,…
A: Increase in shareholders equity=Number of bonds issued×Stock warrants per bond×Market price of each…
Q: On March 1, 2020, ABC Company issued P5,000,000 of 12% nonconvertible bonds at 103 which are due on…
A: The bonds are the debt securities issued by the company to raise money. The bonds are fixed…
58.
On January 1, 2022, A company issued 1,000 of its January 1, 2017, 8%, 10 year, P1,000 face
Round off PV factor to four decimal places. Round off final answer to the nearest peso.
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- Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be converted into 20 shares of the companys 5 par value stock. On July 3, 2020, when the bonds had an unamortized discount of 7,400 and the market value of the McGraw shares was 52 per share, all the bonds were converted into common stock. Required: 1. Prepare the journal entry to record the conversion of the bonds under (a) the book value method and (b) the market value method. 2. Compute the companys debt-to-equity ratio (total liabilities divided by total shareholders equity, as described in Chapter 6) under each alternative. Assume the companys other liabilities are 2 million and shareholders equity before the conversion is 3 million. 3. Assume the company uses IFRS and issued the bonds for 487,500 on July 2, 2018. On this date, it determined that the fair value of each bond was 930 and the fair value of the conversion option was 45 per bond. Prepare the journal entry to record the issuance of the bonds.Tama Companys capital structure consists of common stock and convertible bonds. At the beginning of 2019, Tama had 15,000 shares of common stock outstanding; an additional 4,500 shares were issued on May 4. The 7% convertible bonds have a face value of 80,000 and were issued in 2016 at par. Each 1,000 bond is convertible into 25 shares of common stock; to date, none of the bonds have been converted. During 2019, the company earned net income of 79,200 and was subject to an income tax rate of 30%. Required: Compute the 2019 diluted earnings per share.
- Frost Company has accumulated the following information relevant to its 2019 earningsper share. 1. Net income for 2019: 150,500. 2. Bonds payable: On January 1, 2019, the company had issued 10%, 200,000 bonds at 110. The premium is being amortized in the amount of 1,000 per year. Each 1,000 bond is currently convertible into 22 shares of common stock. To date, no bonds have been converted. 3. Bonds payable: On December 31, 2017, the company had issued 540,000 of 5.8% bonds at par. Each 1,000 bond is currently convertible into 11.6 shares of common stock. To date, no bonds have been converted. 4. Preferred stock: On July 3, 2018, the company had issued 3,800 shares of 7.5%, 100 par, preferred stock at 108 per share. Each share of preferred stock is currently convertible into 2.45 shares of common stock. To date, no preferred stock has been converted and no additional shares of preferred stock have been issued. The current dividends have been paid. 5. Common stock: At the beginning of 2019, 25,000 shares were outstanding. On August 3, 7,000 additional shares were issued. During September, a 20% stock dividend was declared and issued. On November 30, 2,000 shares were reacquired as treasury stock. 6. Compensatory share options: Options to acquire common stock at a price of 33 per share were outstanding during all of 2019. Currently, 4,000 shares may be acquired. To date, no options have been exercised. The unrecognized compens Frost Company has accumulated the following information relevant to its 2019 earnings ns is 5 per share. 7. Miscellaneous: Stock market prices on common stock averaged 41 per share during 2019, and the 2019 ending stock market price was 40 per share. The corporate income tax rate is 30%. Required: 1. Compute the basic earnings per share. Show supporting calculations. 2. Compute the diluted earnings per share. Show supporting calculations. 3. Indicate which earnings per share figure(s) Frost would report on its 2019 income statement.Bats Corporation issued 800,000 of 12% face value bonds for 851,705.70. The bonds were dated and issued on April 1, 2019, are due March 31, 2023, and pay interest semiannually on September 30 and March 31. Bats sold the bonds to yield 10%. Required: 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. 3. Prepare any adjusting entries for the end of the fiscal year, December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. Assume the company retires the bonds on June 30, 2020, at 103 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight-line method of amortization b. effective interest method of amortizationOn January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
- On January 1, 2022, A company issued 1,000 of its January 1, 2017, 8%, 10 year, P1,000 face value bonds with detachable stock warrants at P1,250,000. Each bonds, which pays semi-annual interest every January 1 and July 1, carried 5 detachable warrants which entitle the holder to acquire one share of ordinary shares for every warrant at a specified option price of P55 per share. Immediately after the issuance the prevailing market rate of interest is at 10% and the market value of the warrants was P30. What is the carrying amount of the bonds as of December 31, 2022? Round off PV factor to four decimal places. Round off final answer to the nearest peso.On January 1, 2022, A company issued 1,000 of its January 1, 2017, 8%, 10 year, P1,000 face value bonds with detachable stock warrants at P1,250,000. Each bonds, which pays semi-annual interest every January 1 and July 1, carried 5 detachable warrants which entitle the holder to acquire one share of ordinary shares for every warrant at a specified option price of P55 per share. Immediately after the issuance the prevailing market rate of interest is at 10% and the market value of the warrants was P30. How much is the equity component of the compound instrument? (Round off PV factor to four decimal places. Round off final answer to the nearest peso.) What is the carrying amount of the bonds as of December 31, 2022? (Round off PV factor to four decimal places. Round off final answer to the nearest peso.)Show the computation please. On January 1, 2022, Dirk Corporation issued 1,000 of its January 1, 2017, 8%, 10 year, P1,000 face value bonds with detachable stock warrants at P1,250,000. Each bonds, which pays semi-annual interest every January 1 and July 1, carried 5 detachable warrants which entitle the holder to acquire one share of Dirk Corporation ordinary shares for every warrant at a speciied option price of P55 per share. Immediately after the issuance the prevailing market rate of interest is at 10% and the market value of the warrants was P30. How much is the equity component of the compound instrument? (Round off PV factor to 4 decimal places)
- On December 31, 2022, For Company issued P6,000,000 of 12% bonds payable maturing in five years. The bonds pay interest semiannually. The bonds include detachable stock warrants For the bondholder the right to purchase for P150 per share of P100 par value ordinary shares within the next three years. The bonds and warrants were issued at 120. The value of the warrants at the time of issuance was P800,000. The market rate of interest for similar bonds without the warrants is 10%. On December 31, 2022, the bonds payable should be reported at (round off present value factors to two decimal places)On December 31, 2021, This Company issued P5,000,000 face value, 5-year bonds at 109. Each P1,000 bond was issued with 50 detachable share warrants, each of which entitled the bondholder to purchase one ordinary share of P5 par value at P25. Immediately after issuance, the market value of each warrant was P5. The stated interest rate on the bonds is 11% payable annually every December 31. However, the prevailing market rate of interest for similar bonds without warrants is 12%. What is the carrying amount of the bonds payable on December 31, 2021?On January 1, 2016, Case Company issued P5,000,000 of 12% nonconvertible bonds at 103 which are due on February 28, 2021. In addition, each P1,000 bond was issued with 30 detachable share warrants, each of which entitled the bondholder to purchase, for P 50, one ordinary share of Case Company, par value P25. On January 1, 2016m the quoted market value of each warrant was P4. The market value of the bonds ex-warrants at the time of issuance is 95. What is the carrying amount of the bonds payable on January 1, 2016? 5,000,000 4,750,000 5,150,000 4,550,000 What amount of the proceeds from the bond issue should be recognized as an increase in shareholders’ equity? 600,000 300,000 200,000 400,000
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