On January 1, 2020, Ribond issued a 5-year 12%, P10,000,000 with detachable share warrants. Each P2000 bond is attached with 3 warrants. Interest is payable annually every January 1. The yield rate similar bonds with equity components is 15%. The bonds were selling for P11,597,084, ex-warrants, which will yield 8% interest. The bondholders can purchase 1, P180 par value, ordinary share for P250, for every 2 warrants surrendered. On April 27, 2023, 1,500 bondholders exercised their right to purchase ordinary shares. What is the net increase in equity on date of exercise?
On January 1, 2020, Ribond issued a 5-year 12%, P10,000,000 with detachable share warrants. Each P2000 bond is attached with 3 warrants. Interest is payable annually every January 1. The yield rate similar bonds with equity components is 15%. The bonds were selling for P11,597,084, ex-warrants, which will yield 8% interest. The bondholders can purchase 1, P180 par value, ordinary share for P250, for every 2 warrants surrendered. On April 27, 2023, 1,500 bondholders exercised their right to purchase ordinary shares. What is the net increase in equity on date of exercise?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1RE
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On January 1, 2020, Ribond issued a 5-year 12%, P10,000,000 with detachable share warrants. Each P2000 bond is attached with 3 warrants. Interest is payable annually every January 1. The yield rate similar bonds with equity components is 15%. The bonds were selling for P11,597,084, ex-warrants, which will yield 8% interest.
The bondholders can purchase 1, P180 par value, ordinary share for P250, for every 2 warrants surrendered.
On April 27, 2023, 1,500 bondholders exercised their right to purchase ordinary shares.
What is the net increase in equity on date of exercise?
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