During 2021, Lamb Company issued 10,000 shares of P100 par value convertible preference share for P110 per share. One preference share can be converted into 3 shares of Lamb’s P25 par ordinary share at the option of the preference shareholder. On December 31, 2021, when the market value of the ordinary share was P40, the entire preference share was converted. How much should Lamb credit to Share premium as a result of the conversion?

During 2021, Lamb Company issued 10,000 shares of P100 par value convertible preference share for P110 per share. One preference share can be converted into 3 shares of Lamb’s P25 par ordinary share at the option of the preference shareholder. On December 31, 2021, when the market value of the ordinary share was P40, the entire preference share was converted. How much should Lamb credit to Share premium as a result of the conversion?

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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