On July 1, 2021, after recording interest and amortization, BLUE Company converted ₱5,000,000 of its 12% convertible bonds into 50,000 shares of ₱10 par value ordinary share. On the conversion date, the carrying amount of the bonds was ₱6,000,000, the market value of the bonds was ₱6,500,000 and BLUE's ordinary shares was publicly trading at ₱150 per share. BLUE incurred ₱200,000 in connection with the conversion. What amount of additional share premium should BLUE record as result of the conversion?
On July 1, 2021, after recording interest and amortization, BLUE Company converted ₱5,000,000 of its 12% convertible bonds into 50,000 shares of ₱10 par value ordinary share. On the conversion date, the carrying amount of the bonds was ₱6,000,000, the market value of the bonds was ₱6,500,000 and BLUE's ordinary shares was publicly trading at ₱150 per share. BLUE incurred ₱200,000 in connection with the conversion. What amount of additional share premium should BLUE record as result of the conversion?
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter7: Financial Activities
Section: Chapter Questions
Problem 10QE
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On July 1, 2021, after recording interest and amortization, BLUE Company converted ₱5,000,000 of its 12% convertible bonds into 50,000 shares of ₱10 par value ordinary share. On the conversion date, the carrying amount of the bonds was ₱6,000,000, the market value of the bonds was ₱6,500,000 and BLUE's ordinary shares was publicly trading at ₱150 per share. BLUE incurred ₱200,000 in connection with the conversion. What amount of additional share premium should BLUE record as result of the conversion?
₱ 5,800,000
₱ 5,300,000
₱ 6,000,000
₱ 5,500,000
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