Reference no: EM132808283
On January 2, 2020, the Ming Corp. issued P5,000,000 convertible bonds bearing an annual interest rate of 8%. Interest is payable
annually every December 31 and the bonds mature on December 31, 2024. The bonds were sold at 104. Each P5,000 bond is convertible
into 40 ordinary shares of P100 par. Without the conversion privilege, the bonds would have sold to yield 10%.
On December 31, 2022, after paying the periodic interest, P1,000,000 of the bonds were converted into ordinary shares. On December
- 31, 2023, after paying the periodic interest, P2,000,000 of the bonds were retired at 101.
Problem 1: What amount was assigned to the bond conversion privilege on January 2, 2020?
Problem 2: What amount shall be credited to share premium on December 31, 2022?
Problem 3: How much shall be recognized as gain (loss) on early retirement of bonds on December 31, 2023?
Problem 4: What amount shall be presented as bonds payable on December 31, 2023?