Items 5 to 7 are based on the following information. On January 1, 2020, Sykunno Company issued P5,000,000 of 12% nonconvertible bonds payable at 103 which are due on December 31, 2024. In addition, each P1,000 bond was issued with 30 detachable share warrants, each of which entitle the bond holder to purchase for P50, one ordinary share of Sykunno Company, par value P25. On January 1, 2020, the quoted market value of each warrant was P4. The market value of the bonds, ex-warrant at the time of issuance is 95.
Items 5 to 7 are based on the following information. On January 1, 2020, Sykunno Company issued P5,000,000 of 12% nonconvertible bonds payable at 103 which are due on December 31, 2024. In addition, each P1,000 bond was issued with 30 detachable share warrants, each of which entitle the bond holder to purchase for P50, one ordinary share of Sykunno Company, par value P25. On January 1, 2020, the quoted market value of each warrant was P4. The market value of the bonds, ex-warrant at the time of issuance is 95.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
7. What amount is credited to share premium if all of the share warrants are exercised?
A. 4,350,000
B. 3,750,000
C. 4,150,000
D. 0
E. None of the above
Transcribed Image Text:Items 5 to 7 are based on the following information.
On January 1, 2020, Sykunno Company issued P5,000,000 of 12% nonconvertible bonds payable at 103 which are due on December
31, 2024.
In addition, each P1,000 bond was issued with 30 detachable share warrants, each of which entitle the bond holder to purchase for
P50, one ordinary share of Sykunno Company, par value P25.
On January 1, 2020, the quoted market value of each warrant was P4. The market value of the bonds, ex-warrant at the time of
issuance is 95.
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