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Neu Inc. issues $5 million face amount convertible bonds; the bonds issue at 101. Similar bonds issued without the conversion right would have been issued at 99. Neu applies IFRS.   At time of issuance, Neu should recognize a bond-related liability in the amount of: $ 0. $4.95 million. $5  million. $5.05 million.

Neu Inc. issues $5 million face amount convertible bonds; the bonds issue at 101. Similar bonds issued without the conversion right would have been issued at 99. Neu applies IFRS.   At time of issuance, Neu should recognize a bond-related liability in the amount of: $ 0. $4.95 million. $5  million. $5.05 million.

FINANCIAL ACCOUNTING
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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Neu Inc. issues $5 million face amount convertible bonds; the bonds issue at 101. Similar bonds issued without the conversion right would have been issued at 99. Neu applies IFRS.

 

At time of issuance, Neu should recognize a bond-related liability in the amount of:

  • $ 0.

  • $4.95 million.

  • $5  million.

  • $5.05 million.

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