User Account

All Pages

How much should be reported as equity component

Assignment Help Accounting Basics
Reference no: EM133057127

Question - On Jan. 1, 2021, GO Corporation issued P7,500,000 face amount, 5-year bonds at 111. Each P1,000 bond was issued with 50 detachable share warrants, each of which entitled the bondholder to purchase one ordinary share of P5 par value at P30. Immediately after issuance, the market value of each warrant was P10.

The stated interest rate on the bonds is 11% payable annually every Dec. 31. However, the prevailing market rate of interest for similar bonds without warrants is 12%. The present value of 1 at 12% for 5 periods is 0.57 and the present value of an ordinary annuity of 1 at 12% for 5 periods is 3.60.

How much should be reported as equity component arising from the issuance of bonds payable?

How much should be recorded as share premium if all of the warrants are exercised?

Reference no: EM133057127

Questions Cloud

Justification with views of successful worldwide investors : Comment on this phrase and support your justification with views of successful worldwide investors:' While diversification is a good way to preserve wealth, con
Record the receipt and payment of the first interest payment : Record the receipt and payment of the first interest payment on January 1, 2022, for Metlock Inc., and Bridgeport Corp.
What is the first-year debt coverage ratio : You are an employee of University Consultants, Limited, and have been given the following assignment. You are to present an investment analysis of a small retai
Implications for voting-lotteries-certificate issuance : Prepare a paper on the implications for voting, lotteries, certificate issuance, security auditing and enterprise.
How much should be reported as equity component : On Jan. 1, 2021, GO Corporation issued P7,500,000 face amount, How much should be reported as equity component arising from the issuance of bonds payable
What is the expected return of the portfolio : What is the expected return of the portfolio? Do not round intermediate calculations. Round the answer to two decimal places. Fill in the blank 1 %
What is Important for Effective ERM : What are some Key Challenges and Solutions to Implementing an ERM? What is Important for an Effective ERM?
Company weighted average cost of capital : Williams, Inc., has compiled the following information on its financing costs:
What is the new company cost of equity : Company B is financed entirely with Equity. The stock of Company B is publicly traded and has a Beta = 1.0.

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