The date is January 1, 2018. Nomi Corporation issued 4,000 five-year bonds of 10% P1,000 face value, The interest on the bonds are paid annually every December 31. Each bond contains one warrant which can be used to acquire 5 shares of P55 par value ordinary shares for P62 per share. Without the warrants, the bonds would sell at 98.5. The bond price with warrants, on the other hand, is 103. On December 31, 2018, half of the warrants were exercised. On the date of issuance, how much is attributable to the equity component? Round off final answer to nearest peso. Question 34 Based on Question 33, how much is the credit to the ordinary share premium to be recognized upon exercise of warrant? Round off final answer to nearest peso.

The date is January 1, 2018. Nomi Corporation issued 4,000 five-year bonds of 10% P1,000 face value, The interest on the bonds are paid annually every December 31. Each bond contains one warrant which can be used to acquire 5 shares of P55 par value ordinary shares for P62 per share. Without the warrants, the bonds would sell at 98.5. The bond price with warrants, on the other hand, is 103. On December 31, 2018, half of the warrants were exercised. On the date of issuance, how much is attributable to the equity component? Round off final answer to nearest peso. Question 34 Based on Question 33, how much is the credit to the ordinary share premium to be recognized upon exercise of warrant? Round off final answer to nearest peso.

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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ABC Company issued a 3-year,12%, 2,000 of P 1,000 face value bonds with warrants at 98 on January 1, 2020. The nominal rate is payable annually on December 31. When the bonds are issued, the prevailing market rate of interest for similar bonds without warrants is 15% per annum. Each bond is accompanied by a warrant that permits the bondholder to purchase 20 shares of common stock, par P 30, at P45 per share. How much is the amount allocated to warrants to be recognized by ABC Company? (For present value factors, do not round off) 96,993.51 96,939.51 99,969.51 184,109.8
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