On January 1, 2022, A company issued 1,000 of its January 1, 2017, 8%, 10 year, P1,000 face value bonds with detachable stock warrants at P1,250,000. Each bonds, which pays semi-annual interest every January 1 and July 1, carried 5 detachable warrants which entitle the holder to acquire one share of ordinary shares for every warrant at a specified option price of P55 per share. Immediately after the issuance the prevailing market rate of interest is at 10% and the market value of the warrants was P30. How much is the equity component of the compound instrument? (Round off PV factor to four decimal places. Round off final answer to the nearest peso.) What is the carrying amount of the bonds as of December 31, 2022? (Round off PV factor to four decimal places. Round off final answer to the nearest peso.)
On January 1, 2022, A company issued 1,000 of its January 1, 2017, 8%, 10 year, P1,000 face value bonds with detachable stock warrants at P1,250,000. Each bonds, which pays semi-annual interest every January 1 and July 1, carried 5 detachable warrants which entitle the holder to acquire one share of ordinary shares for every warrant at a specified option price of P55 per share. Immediately after the issuance the prevailing market rate of interest is at 10% and the market value of the warrants was P30. How much is the equity component of the compound instrument? (Round off PV factor to four decimal places. Round off final answer to the nearest peso.) What is the carrying amount of the bonds as of December 31, 2022? (Round off PV factor to four decimal places. Round off final answer to the nearest peso.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 3C
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On January 1, 2022, A company issued 1,000 of its January 1, 2017, 8%, 10 year, P1,000 face value bonds with detachable stock warrants at P1,250,000. Each
bonds, which pays semi-annual interest every January 1 and July 1, carried 5 detachable warrants which entitle the holder to acquire one share of ordinary shares for every warrant at a specified option price of P55 per share. Immediately after the issuance the prevailing market rate of interest is at 10% and the market value of the warrants was P30.
How much is the equity component of the compound instrument? (Round off PV factor to four decimal places. Round off final answer to the nearest peso.)
What is the carrying amount of the bonds as of December 31, 2022? (Round off PV factor to four decimal places. Round off final answer to the nearest peso.)
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