37. Share warrants (from the bonds with detachable warrants) a.5,400b.9,000c.14,400d.0http://e.No answer from the given choices.38. Ordinary share capital (year-end balance, 2021) a.21,411,000b.21,611,000c.21,000,000d.5,411,000http://e.No answer from the given choices.39. Share premium from bond conversion a.473,184b.463,408c.400,000d.126,816http://e.No answer from the given choices.40. Share premium from the exercise of share warrants (Nov.1, 2021) a.5,600b.41,800c.14,400d.0e.No answer from the given choices AQUAMARINE Corporation had the following account balances as of December31,2020:8% convertible bonds @face valuePhp 2,000,000Share capital (4,000,000 shares authorized, Php 10 par1,600,000 shares issued)1,600,000Share Premium4,590,000Retained Earnings4,930,000Treasury Shares at Cost650,000Transactions during 2021 and other information relating to the Corporationsliabilityandequityfollows:wereasOn January 2, 2017, AQUAMARINE Corporation issued Php 2,000,000 of 8%convertible bonds at par. The maturity of the bond is on January 1, 2021 andinterest is payable annually every January 1. The bond contract entitles the holdersto receive 6. Php 10 par value ordinary shares in exchange for each 100 bonds.On the date of issue, the prevailing market interest rate for similar debt without theconversion option is 10%.PV of Principal0.68303.1699PFV of InterestJan. 1.2021The holders of the bonds with a total face value of Php 1,000,000 exercisedthe conversion privilege. On that date, the bonds were selling at Php 110and the ordinary shares at Php 42.Jan.The corporation reissued 30,000 of its 50,000 treasury shares for Php 550,000.The treasury shares had been acquired February 28, 2020.15,2021Feb. 1,2021Sold 180, Php 1,000, 9% bonds due February 1, 2031 at Php 103 with onedetachable share warrant attached to each bond. Interest is payableannually on February 1. The fair value of the bonds without the sharewarrants is Php 95. The detachable warrants have a fair value of Php 50each and expire on February 1, 2022. Each warrant entitles the holder topurchase 10 ordinary shares at Php 40.500,000 shares were issued for cash, par value Php 15.Jul. 1,2021Nov.There were 110 share warrants detached from the bonds and exercised.1,2021Dec.The remaining treasury shares were retired..1,2021

(a) The share warrants with bonds is calculated below:- Share warrants =* Fair value of warrants *…

Answered: 37. Share warrants (from the bonds with…

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 5MC: Kent Corporation was organized on January 1, 2014. On that date, it issued 200,000 shares of 10 par...