On January 1, 2022, Iced Latte Corporation issued 5,000 10-year bonds of 12% P1,000 face value, each with warrants to acquire ordinary shares at P60 per share. The interest on the bonds is payable annually every December 31. Each bond contains one warrant which can be used to acquire 5 shares of P50 par value ordinary shares. It is estimated that without the warrants, the bonds would sell at 98 (at an effective interest of 12.36%) The bond price with warrants is 106. What amount is allocated to equity upon issuance of bonds?
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On January 1, 2022, Iced Latte Corporation issued 5,000 10-year bonds of 12% P1,000 face value, each with warrants to acquire ordinary shares at P60 per share. The interest on the bonds is payable annually every December 31. Each bond contains one warrant which can be used to acquire 5 shares of P50 par value ordinary shares. It is estimated that without the warrants, the bonds would sell at 98 (at an effective interest of 12.36%) The
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- On January 2, 2015, Blossom Corporation issued $1,600,000 of 10% bonds at 99 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method.") The bonds are callable at 102 (i.e., at 102% of face amount), and on January 2, 2020, Blossom called $960,000 face amount of the bonds and redeemed them. Ignoring income taxes, compute the amount of loss, if any, to be recognized by Blossom as a result of retiring the $960,000 of bonds in 2020. (Round answer to 0 decimal places, e.g. 38,548.) Loss on redemption $ Prepare the journal entry to record the redemption. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent…On March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of $160 million. ● ● ● ● The bonds were priced at $142.50 million (plus accrued interest) to yield 12%. The price if issued on January 1 would have been $139.75 million. Interest is paid semiannually on June 30 and December 31. Baddour's fiscal year ends September 30. Required: 1. to 3. What would be the amount(s) related to the bonds Baddour would report in its balance sheet, income statement and statement of cash flows for the year ended September 30, 2024? Note: Enter your answers in whole dollars. Negative amounts should be indicated by a minus sign. Balance sheet: Bonds payable (net) Income statement: Interest expense Statement of cash flows: Financing activities Operating activitiesOn January 1, 2021, Marceline the Vampire Queen Co. purchased P1,000,000 10% bonds classified at amortized cost. The bonds were purchased to yield 12%. Interest is payable annually every December 31. The bonds mature on December 31, 2025. On December 31, 2021, the bonds were selling at 99. OnJanuary 2, 2023, Marceline the Vampire Queen Co. sold P500,000 face value bonds at 101. The bonds were selling at 103 on December 31, 2023. Based on the above and the result of your audit, answer the following: Present value of 1 for 3 periods at 12%: 0.635518078 Present value of an annuity of 1 for 10 periods at 12%: 3.037349347 1. The purchase price of the bonds on January 1, 2021 is closest to a. 927,800 b. 1,075,796 c. 946,480 d. 939,253 2. The carrying amount of the investment in bonds on December 31, 2021 is closest to a. 1,063,376 b. 960,058 c. 951,963 d. 939,226 3. How much is the gain/loss on sale on January 2, 2023? a. 21,981 gain b. 21,981 loss c. 41,963 gain d. 41,963 loss 4. How much…
- Waldron Corporation issued $900,000 of 16%, 10-year bonds payable on January 1, 2022. The market interest rate at the date of issuance was 14%, and the bonds pay interest semiannually (on June 30 and December 31). Waldron Corporation's year-end is June 30. Read the requirements 1. Using the PV function in Excel, calculate the issue price of the bonds. (Round your answer to the nearest whole dollar) The issue price of the bonds is Requirements 1. Using the PV function in Excel, calculate the issue price of the bonds. 2. Prepare an effective-interest amortization table for the bonds through the first three interest payments, Round amounts to the nearest dollar. 3. Record Waldron Corporation's issuance of the bonds on January 1, 2022, and payment of the first semiannual interest amount and amortization of the bond premium on June 30, 2022 Explanations are not required Print DoneOn March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of $160 million. • The bonds were priced at $143.50 million (plus accrued Interest) to yield 12%. • The price if Issued on January 1 would have been $140.75 million. Interest is paid semiannually on June 30 and December 31. • Baddour's fiscal year ends September 30. Required: 1. to 3. What would be the amount(s) related to the bonds Baddour would report in its balance sheet, Income statement and statement of cash flows for the year ended September 30, 2024? Note: Enter your answers in whole dollars. Negative amounts should be indicated by a minus sign. Balance sheet: Bonds payable (net) Cash Income statement: Interest expense Statement of cash flows: Financing activities Operating activitiesOn September 1, 2025, Splish Company sold at 104 (plus accrued interest) 5,760 of its 9%, 10-year, $1,000 face value, nonconvertible bonds with detachable stock warrants. Each bond carried two detachable warrants. Each warrant was for one share of common stock at a specified option price of $14 per share. Shortly after issuance, the warrants were quoted on the market for $3 each. No fair value can be determined for the Splish Company bonds. Interest is payable on December 1 and June 1. Prepare in general journal format the entry to record the issuance of the bonds. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date September 1, 2025 Account Titles and Explanation Cash Bonds Payable Premium on Bonds Payable Paid-in Capital-Stock Warrants Interest Payable Debit 6120000 Credit 5760000 207360 23040…
- Kingbird Inc. issued $3,000,000 of convertible 10-year bonds on July 1, 2025. The bonds provide for 11% interest payable semiannually on January 1 and July 1. The discount in connection with the issue was $56,400, which is being amortized monthly on a straight-line basis. The bonds are convertible after one year into 9 shares of Kingbird Inc's $100 par value common stock for each $1,000 of bonds. On August 1, 2026, $300,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion, any accrued interest on bonds being converted is paid in cash. Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the…On September 30, 2023, Sunland Inc. issued $3,280,000 of 10-year, 8% convertible bonds for $3,772,000. The bonds pay interest on March 31 and September 30 and mature on September 30, 2033. Each $1,000 bond can be converted into 80 no par value common shares. In addition, each bond included 20 detachable warrants. Each warrant can be used to purchase one common share at an exercise price of $15. Immediately after the bond issuance, the warrants traded at $3 each. Without the warrants and the conversion rights, the bonds would have been expected to sell for $3,444,000. On March 23, 2026, half of the warrants were exercised. The common shares of Sunland were trading at $20 each on this day. Immediately after the payment of interest on the bonds, on September 30, 2028, all bonds outstanding were converted into common shares. Assume the entity follows IFRS. (e) Your answer is partially correct. Prepare the journal entry to account for the exercise of the warrants on March 23, 2026. (Credit…Sunland Corporation issued 6,000, five year, 3% bonds at 103 on January 1, 2023. Interest is paid annually. Each $1,000 bond carried one detachable warrant allowing the holder to purchase 100 common shares in Sunland at $9 per share, the price at which Sunland shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 6%. On June 30, 2023, 1,200 of the bond holders exercised the options to buy the shares. Prepare the journal entries to record these events. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places eg. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date January 1, 2023 June 30, 2023 Account Titles and…
- Florence Inc. issued 8,000, 5-year convertible bonds of $2,000 each for $4,000,000 at the beginning of 2021. The bonds have a stated rate of interest of 9% and interest is payable annually. Each bond can be convertible into 100 shares with a par value of $10. The market rate of similar nonconvertible debt is 10%. Determine the fair value of the equity component using the “with-and-without” method is a. $3,848,288 b. $2,483,600 c. $1,365,688 d. $151,712Libertine Co. issued $10,000,000 of 9%, 10-year, convertible bonds on January 1, 2020. Interest is paid annually on December 31. At the time of the bonds issuance, the market rate for non-convertible bonds was 10%. Each $1,000 bond is convertible into 15 common shares. In 2025, half of the bondholders decided to convert their bonds into common shares. How many shares were issued as a result of the conversion? Question 10 options: 75,000 140,783 15,000 150,000On January 2, 2014, a calendar-year corporation sold 12% bonds with a face value of $200,000. These bonds mature in six years, and interest is paid semi-annually on June 30 and December 31. The bonds were yield 10%. What was the issue price of the bond? a. $217,726.50 b. $183,232.31 c. $200,000.00 d. $344,000.00 e. None of the above
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