On July 1, 2020, Brimstone Company issued 5,000 P1,000 bonds with share warrants at its fair value of 115. The bonds carried an 11% interest payable every June 30 for five years. Each bond carried share warrants to purchase ten ordinary shares with a par value of P50 for P65. The effective rate of interest of the bonds ex-warrants is 8%. Sixty percent of the share warrants were exercised during 2021. note: Round off present value factors to four decimal places. question: 1. How much is the interest expense during 2021?
On July 1, 2020, Brimstone Company issued 5,000 P1,000 bonds with share warrants at its fair value of 115. The bonds carried an 11% interest payable every June 30 for five years. Each bond carried share warrants to purchase ten ordinary shares with a par value of P50 for P65. The effective rate of interest of the bonds ex-warrants is 8%. Sixty percent of the share warrants were exercised during 2021. note: Round off present value factors to four decimal places. question: 1. How much is the interest expense during 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On July 1, 2020, Brimstone Company issued 5,000 P1,000 bonds with share warrants at its fair value of 115. The bonds carried an 11% interest payable every June 30 for five years. Each bond carried share warrants to purchase ten ordinary shares with a par value of P50 for P65. The effective rate of interest of the bonds ex-warrants is 8%.
Sixty percent of the share warrants were exercised during 2021.
note: Round off present value factors to four decimal places.
question:
1. How much is the interest expense during 2021?
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