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The following information is related to ABC Company’s 10% convertible bonds as of December 31, 2020: Face value                                                       1,000,000 Discount on Bonds Payable                                 90,000 Share premium – Conversion Privilege            200,000 On this date, all of the bonds were converted into ordinary shares. Each P1,000 bond was converted to 10 shares of P50 par value. What amount of share premium on the conversion of bonds shall ABC Company recognize on December 31, 2020?

The following information is related to ABC Company’s 10% convertible bonds as of December 31, 2020: Face value                                                       1,000,000 Discount on Bonds Payable                                 90,000 Share premium – Conversion Privilege            200,000 On this date, all of the bonds were converted into ordinary shares. Each P1,000 bond was converted to 10 shares of P50 par value. What amount of share premium on the conversion of bonds shall ABC Company recognize on December 31, 2020?

FINANCIAL ACCOUNTING
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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The following information is related to ABC Company’s 10% convertible bonds as of December 31, 2020:

Face value                                                       1,000,000

Discount on Bonds Payable                                 90,000

Share premium – Conversion Privilege            200,000

On this date, all of the bonds were converted into ordinary shares. Each P1,000 bond was converted to 10 shares of P50 par value. What amount of share premium on the conversion of bonds shall ABC Company recognize on December 31, 2020?

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