On January 1, 2016, Saul Company issued convertible bonds with a face amount ofP 5,000,000 for P 6,000,000. The bonds are convertible into 50,000 shares with P 100par value. The bond have a 5-year life with 10% stated interest rate payable annuallyevery December 31.The fair value of the convertible bonds without conversion option is computed atP 5,399,300 on January 1, 2016.Rectangular SnipOn Dec. 31, 2018, the convertible bonds were not converted but fully paid forP5,550,000.On such date, the fair value of the bonds without conversion privilege is P 5,400,000and the carrying amount is P 5,178,300.What is the carrying amount of the bonds payable on January 1, 2016?

It is the amount liable to the bondholders by the issuer of bonds. This bonds payable will be…

Answered: On January 1, 2016, Saul Company issued…

On January 1, 2016, Saul Company issued convertible bonds with a face amount of P 5,000,000 for P 6,000,000. The bonds are convertible into 50,000 shares with P 100

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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On July 1, 2016, A Corp sells $400,000 13% bonds at 106. Each $1,000 bond carries 15 warrants, and each warrant allows the holder to acquire one share of $10 par value common stock for $25 per share. Immediately following the issuance of the securities, the bonds are quoted at 101 ex rights, and the warrants are quoted at $3.50 each. note: do not round allocation % during calculation. What value should be assigned to paid-in- capital: stock warrants on the date of issuance? $22,039.62 $24,000.00 $20,950.59 $21,000.00
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