User Account

All Pages

Does the probability of conversion to equity influence

Assignment Help Accounting Basics
Reference no: EM132649290

Question - Barry Ltd issued some convertible bonds to Bennett Ltd. They have a life of three years and pay interest to Bennett Ltd each six months. The convertible bonds will be converted to shares only if Bennett makes the decision, at any time in the next three years, that it would prefer to receive shares in Barry Ltd, rather than have its funds repaid.

REQUIRED -

(a) At the time of issue, should Barry Ltd disclose the convertible bonds as debt, equity or part debt and part equity?

(b) Does the probability of conversion to equity influence whether the convertible bonds are disclosed as debt or equity?

(c) If Bennett Ltd notifies Barry Ltd that it would like to convert the convertible bonds to shares in Barry Ltd then will this influence how the convertible bonds are disclosed in the financial statements of Barry Ltd? Explain your answer.

Reference no: EM132649290

Questions Cloud

Assess the value of the fiscal and monetary tools : Assess the value of the fiscal and monetary tools that have been used to try to stabilize the economy during the global pandemic. Use evidence to support your a
Increased or declined based on considerable reduction : Your explanation of whether presidential power has increased or declined based on the considerable reduction in the number of executive orders issued
What is the expected relation between a change : Explain the variables you would include in the function. What is the expected relation between a change in each of these variables and short-run total variable
Briefly outline the key accounting principles : Briefly outline the key accounting principles and practices relevant to the preparation of tax documentation for individual taxpayers
Does the probability of conversion to equity influence : Does the probability of conversion to equity influence whether the convertible bonds are disclosed as debt or equity
What credible economists say about the effects that tariffs : Discuss what credible economists say about the effects that tariffs, changing trade agreements, and/or manipulating exchange rates will have on the total US tra
How uncertainties and joe potential biases might affect : How uncertainties and Joe's potential biases might affect interpretation of the breakeven analysis results. Calculate the contribution margin per unit
How much premium or discount will be recorded : A bond has a maturity value of $300,000 payable in 4 years. How much premium or discount will be recorded upon purchase (rounded)
Find recession and political instability affects exchange : How does government debt, recession and political instability affects the exchange rate

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd