On January 1, 2020, Blossom Ltd. issued 820 5-year, 11% convertible bonds at par of $1,000, with interest payable each December 31. Each bond is convertible into 100 common shares, and the current fair value of each common share is $6. Similar straight bonds carry an interest rate of 13%. Calculate the PV of the debt component by itself. Calculate using any of the following methods: (1) factor tables, (2) a financial calculator, or (3) Excel function PV. QUESTION: 1) PV of the debt component 2) How should Blossom record the issuance if it follows IFRS? Use the amount you arrived at in part (a) using a financial calculator or Excel. Date Account Titles and Explanation January 1 enter an account title enter an account title January 1 enter an account title Date Account Titles and Explanation enter an account title Debit 3) How should Blossom record the issuance if it follows ASPE? enter an account title enter a debit amount enter a credit amount Credit enter a debit amount enter a credit amount enter a debit amount enter a credit amount Debit Credit enter a debit amount enter a credit amount enter a debit amount enter a credit amount

On January 1, 2020, Blossom Ltd. issued 820 5-year, 11% convertible bonds at par of $1,000, with interest payable each December 31. Each bond is convertible into 100 common shares, and the current fair value of each common share is $6. Similar straight bonds carry an interest rate of 13%. Calculate the PV of the debt component by itself. Calculate using any of the following methods: (1) factor tables, (2) a financial calculator, or (3) Excel function PV. QUESTION: 1) PV of the debt component 2) How should Blossom record the issuance if it follows IFRS? Use the amount you arrived at in part (a) using a financial calculator or Excel. Date Account Titles and Explanation January 1 enter an account title enter an account title January 1 enter an account title Date Account Titles and Explanation enter an account title Debit 3) How should Blossom record the issuance if it follows ASPE? enter an account title enter a debit amount enter a credit amount Credit enter a debit amount enter a credit amount enter a debit amount enter a credit amount Debit Credit enter a debit amount enter a credit amount enter a debit amount enter a credit amount

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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