27. Ebasan Company issued 2,000 convertible bonds. The bonds have a 3 year term, and are issued at par with a face value of P1,000 per bond. Interest is payable annually in arrears at a nominal annual interest rate of 6%. Each bond is convertible at any time up to maturity into 250 ordinary shares. The entity has an option to settle the principal amount of the convertible bonds in ordinary shares or in cash. When the bonds are issued, the prevailing market interest rate for similar debt without a conversion option is 9%. At the issue date, the market price of one ordinary share is P3. The issuance of convertible bonds increased Ebasan's equity by A. 151,878 B. 896,025 C. 134,872 D. O

27. Ebasan Company issued 2,000 convertible bonds. The bonds have a 3 year term, and are issued at par with a face value of P1,000 per bond. Interest is payable annually in arrears at a nominal annual interest rate of 6%. Each bond is convertible at any time up to maturity into 250 ordinary shares. The entity has an option to settle the principal amount of the convertible bonds in ordinary shares or in cash. When the bonds are issued, the prevailing market interest rate for similar debt without a conversion option is 9%. At the issue date, the market price of one ordinary share is P3. The issuance of convertible bonds increased Ebasan's equity by A. 151,878 B. 896,025 C. 134,872 D. O

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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Financial Statements from the End-of-Period Spreadsheet Triton Consulting is a consulting firm owned and operated by Jayson Neese. The following end-of-period spreadsheet was prepared for the year ended April 30, 20Y3: During the year ended April 30, 20Y3, common stock of $5,000 vwas issued. Triton Consulting End-of-Period Spreadsheet For the Year Ended April 30, 20Y3 Unadjusted Adjusted Trial Balance Adjustments Trial Balance Account Title Dr. Cr. Dr. Cr. Dr. Cr. Cash 21,500 21,500 Accounts Receivable 51,150 51,150 Supplies 2,400 1,650 750 Office Equipment 32,000 32,000 Accumulated Depreciation 4,500 900 5,400 Accounts Payable 3,350 3,350 Salaries Payable 2,000 2,000 Common Stock 20,000 20,000 Retained Earnings 52,200 52,200 Dividends 10,000 10,000 Fees Earned 279,000 279,000 Salary Expense 240,000 2,000 242,000 Supplies Expense 1,650 1,650 Depreciation Expense 900 900 Miscellaneous Expense 2,000 2,000 359,050 359,050 4,550 4,550 361,950 361,950
2. On January 1, 20X1, Toy inc. Issued $500,000 of convertible bonds. The bonds mature on December 31, 20X5, Interest is payable annually at 6.0% on December 31. The bonds are convertible at the investor's option at the rate of 20 common shares for each $1,000 bond. Similar bonds without the conversion option were selling for $475,000 at time of issuance. Transaction costs of $10,000 were incurred. Required Prepare the journal entry to record the issuance of the bonds.
A. Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 3% when the market rate was 14%. Interest was paid annually. The bonds were sold at 94.1. What was the sales price of the bonds? B. Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 1% when the market rate was 14%. Interest was paid annually. The bonds were sold at 106.2. What was the sales price of the bonds? C. Halep Inc. borrowed $36,386 from Davis Bank and signed a 1-year note payable stating the interest rate was 8% compounded annually. What is the interest portion of the payment for year 1? Round to the nearest penny, two decimal places.
Debond Corp. issues £1,000,000 worth of fi ve-year bonds, dated 1 January 2010, whenthe market interest rate on bonds of comparable risk and terms is 6 percent. Th e bondspay 5 percent interest annually on 31 December. What are the sales proceeds of thebonds when issued, and how is the issuance refl ected in the fi nancial statements?
1. On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $312,177. The journal entry to record the issuance of the bond is: Debit Cash $312,177; credit Discount on Bonds Payable $12,177; credit Bonds Payable $300,000. Debit Cash $300,000; debit Premium on Bonds Payable $12,177; credit Bonds Payable $312,177. Debit Bonds Payable $300,000; debit Interest Expense $12,177; credit Cash $312,177. Debit Cash $312,177; credit Premium on Bonds Payable $12,177; credit Bonds Payable $300,000. Debit Cash $312,177; credit Bonds Payable $312,177.
Enviro Company issues 8%, 10-year bonds with a par value of $340,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 1/2. The straight-line method is used to allocate interest expense. 1. What are the issuer's cash proceeds from issuance of these bonds? 2. What total amount of bond interest expense will be recognized over the life of these bonds? 3. What is the amount of bond interest expense recorded on the first interest payment date? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What total amount of bond interest expense will be recognized over the life of these bonds? Note: Round final answers to the nearest whole dollar amount. Total Bond Interest Expense Over Life of Bonds: Amount repaid: 20 payments of Par value at maturity $ 13,600 $ Total repayments Less amount borrowed (cash proceeds from part 1) Total bond interest expense < $ Required…
Enviro Company issues 12.00%, 10-year bonds with a par value of $460,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 9.00%, which implies a selling price of 128.625. The straight-line method is used to allocate interest expense. What are the issuer's cash proceeds from issuance of these bonds? What total amount of bond interest expense will be recognized over the life of these bonds? What is the amount of bond interest expense recorded on the first interest payment date?
On April 1, 20x9, Mountain Corp. issued 200 of its ₱1,000 face value bonds at 101 plus accrued interest. The bonds were dated November 1, 20x8, and bear interest at an annual rate of 9% payable semiannually on November 1 and May 1. What amount did Mountain receive from the bond issuance?
1. On January 1, 20X2, Tanangonan Company acquired all the assets and assumed all the liabilities of Ong Company. In exchange for the net assets of Ong, Tanangonan gave its bond payable with a maturity value of P600,000 with a stated rate of 10% interest payable semiannually on June 30 and December 31. The said bond will mature after 10 years and has a yield rate of 12%. The Statement of Financial Position (SFP) of both companies as of January 1, 20X2 were as follows: Tanangonan Book Value Ong Book Value Fair Value P250,000 352,700 Cash P114,000 150,000 232,000 100,000 410,000 (170,500) 136,450 (90,450) P881,500 P114,000 135,000 310,000 315,000 54,900 Receivables Inventories 848,300 700,000 950,000 (325,000) 262,750 (70,050) P2,968,700 Land Buildings Accumulated Depreciation – Buildings Equipment Accumulated Depreciation – Equipment Total Assets 39,450 P968,350 Current Liabilities Bond Payable Common Stock, P15 par value Common Stock, P5 par value Other Contributed Capital Retained…
1. On January 1, 2020, CHAR Company issued P 10,000,000 convertible bonds with a stated rate of 12% at 110. The principal of the bonds is payable on December 31, 2024. Interest on the bonds is payable annually starting December 31, 2020. Each P 5,000 bond is convertible into 20 ordinary shares of P 50 par. Without the bond conversion privilege, the bonds would have sold to yield 10%. On December 31, 2021, after paying periodic interests, half of the bonds issued were converted to ordinary shares. On October 1, 2023, half of the remaining bonds were retired at 102 plus accrued interest. Without the bond conversion privilege, the bonds are quoted at 101. How much was credited to the share premium- ordinary account at the time of conversion of bonds on December 31, 2021? (For present value factors, do not round off) 2. On January 1, 2021, MAMA Company sold the property to the PAPA Company. There was no established exchange price for the property, and PAPA gave MAMA a P2,000,000…
H1. Account
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