On July 1, 2020, 2-SO Company issued 10% bonds with a maturity value of P5,000,000 together with 50,000 shares with P50 par value Ordinary share for a combined cash amount of P12,000,000. The market value of 2-SO’s Ordinary share cannot be ascertained. If the bonds were issued separately, they would have sold for P5,500,000. Your audit disclosed that 2-SO recorded bonds payable with premium and no premium for ordinary shares that was issued. What amount of audit adjustment to correct the share premium on ordinary share on the issuance?
On July 1, 2020, 2-SO Company issued 10% bonds with a maturity value of P5,000,000 together with 50,000 shares with P50 par value Ordinary share for a combined cash amount of P12,000,000. The market value of 2-SO’s Ordinary share cannot be ascertained. If the bonds were issued separately, they would have sold for P5,500,000. Your audit disclosed that 2-SO recorded bonds payable with premium and no premium for ordinary shares that was issued. What amount of audit adjustment to correct the share premium on ordinary share on the issuance?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On July 1, 2020, 2-SO Company issued 10% bonds with a maturity value of P5,000,000 together with 50,000 shares with P50 par value Ordinary share for a combined cash amount of P12,000,000. The market value of 2-SO’s Ordinary share cannot be ascertained. If the bonds were issued separately, they would have sold for P5,500,000. Your audit disclosed that 2-SO recorded bonds payable with premium and no premium for ordinary shares that was issued.
What amount of audit adjustment to correct the share premium on ordinary share on the issuance?
Answer in figures, ignore peso sign.
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