Reference no: EM132650636

Problem 1: On January 1, 2020, ABC Company converted its 12%, $1,500,000 face value bonds payable with carrying amount of $1,552,049 for 20,000 ordinary shares with a par value of $50. The bonds were originally issued to yield 10%. The fair value of the bonds on the date of retirement is $1,600,000. Assuming that the bonds are convertible and the share premium from conversion option was $60,000. How much is the gain (loss) on conversion of the bonds to be recognized in the profit or loss during the period? (Round off present value factors up to four decimal places, in presenting your final answer round-up to the nearest dollar)