Problem 5-2 YOUNG Company issued 5,000 convertible bonds at the beginning of the current year. The bonds had a four-year term with a stated rate of interest of 6% and were issued at par with face value of P1,000 per bond. Interest is payable annually on December 31. Each bond is convertible into 50 ordinary shares with a par value of P10. The market rate of interest on similar convertible bonds is 9%. At the issuance date, the amount of P485,000 was credited to share premium from conversion privilege. The bonds were not converted and instead, the entity paid off the convertible bondholders as maturity. Required: Prepare the journal entries to record the following: 1. 2. Issuance of convertible bonds Settlement of bonds payable

Problem 5-2 YOUNG Company issued 5,000 convertible bonds at the beginning of the current year. The bonds had a four-year term with a stated rate of interest of 6% and were issued at par with face value of P1,000 per bond. Interest is payable annually on December 31. Each bond is convertible into 50 ordinary shares with a par value of P10. The market rate of interest on similar convertible bonds is 9%. At the issuance date, the amount of P485,000 was credited to share premium from conversion privilege. The bonds were not converted and instead, the entity paid off the convertible bondholders as maturity. Required: Prepare the journal entries to record the following: 1. 2. Issuance of convertible bonds Settlement of bonds payable

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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