On July 1,2019, after recording interest and amortization, ABC Company converted P 2,000,000 bonds of its 12% convertible bonds into 50,000 ordinary shares, P 25 par value. On the conversion date, the carrying amount of the bonds was P 2,600,000 and the paid in capital arising from the conversion privilege recognized in the accounts is P 150,000. The market value of the bonds without the conversion privilege was P 2,800,000, and ABC Company's ordinary share was publicly trading at P 45 each. Under IAS 32, what amount of share premium should ABC Company credit upon conversion of the bonds?
On July 1,2019, after recording interest and amortization, ABC Company converted P 2,000,000 bonds of its 12% convertible bonds into 50,000 ordinary shares, P 25 par value. On the conversion date, the carrying amount of the bonds was P 2,600,000 and the paid in capital arising from the conversion privilege recognized in the accounts is P 150,000. The market value of the bonds without the conversion privilege was P 2,800,000, and ABC Company's ordinary share was publicly trading at P 45 each. Under IAS 32, what amount of share premium should ABC Company credit upon conversion of the bonds?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On July 1,2019, after recording interest and amortization, ABC Company converted P 2,000,000
bonds of its 12% convertible bonds into 50,000 ordinary shares, P 25 par value. On the
conversion date, the carrying amount of the bonds was P 2,600,000 and the paid in capital
arising from the conversion privilege recognized in the accounts is P 150,000. The market
value of the bonds without the conversion privilege was P 2,800,000, and ABC Company's
ordinary share was publicly trading at P 45 each.
Under IAS 32, what amount of share premium should ABC Company credit upon
conversion of the bonds?
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