Keir Corporation issues 10%, P5,000,000, 10-year bonds with face value of P1,000 and nondetachable share warrants at 110. Each bond carried one detachable warrant that permits the bondholder to purchase 20 equity shares, par P50, at P55 per share. The prevailing market rate of interest for similar bonds without warrants is 12% per annum. On the date of exercise of the warrants, how much is the amount of 'ordinary shares' to be recorded?

Keir Corporation issues 10%, P5,000,000, 10-year bonds with face value of P1,000 and nondetachable share warrants at 110. Each bond carried one detachable warrant that permits the bondholder to purchase 20 equity shares, par P50, at P55 per share. The prevailing market rate of interest for similar bonds without warrants is 12% per annum. On the date of exercise of the warrants, how much is the amount of 'ordinary shares' to be recorded?

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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