On December 31, 2022, Two Company issued 5,000 of its 12%, 10-year P1,000 face value bonds with detachable stock warrants at 110. Each bond carried a detachable warrant for ten shares of Two's P100 par value ordinary shares at a specified option price of P120. Immediately after issuance, the market value of the bonds ex-warrants was P4,800,000 and the market value of the warrants were ascertained to be P1,200,000. For the issuance of the bonds, what amount should be the increase in shareholders equity?
On December 31, 2022, Two Company issued 5,000 of its 12%, 10-year P1,000 face value bonds with detachable stock warrants at 110. Each bond carried a detachable warrant for ten shares of Two's P100 par value ordinary shares at a specified option price of P120. Immediately after issuance, the market value of the bonds ex-warrants was P4,800,000 and the market value of the warrants were ascertained to be P1,200,000. For the issuance of the bonds, what amount should be the increase in shareholders equity?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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