Prepare journal entries for all necessary journal entries

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Question - On April 1, 2006, an 8% convertible loan with a nominal value of P600,000 was issued at par. It is redeemable on March 31, 2010 also at par. Alternatively, it may be converted into equity shares on the basis of 100 new shares for each P200 worth of note.

An equivalent loan note without the conversion option would have carried interest at 10%. Interest of P48,000 has already been paid and included as a finance cost.

Required - Prepare journal entries for the following: a. all necessary journal entries for the year 2006 b. 60% of the note is converted c. the remaining notes were paid in cash.

Reference no: EM133176176

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