Reference no: EM133065207
Question - On January 1, 2019, Peach Corp issued its 5 year, 12% 5,000,000 face value convertible debt instrument for P4,800,000. The debt instrument is convertible into 80,000 ordinary shares with a P50 par value and can be converted anytime from January 2020 to maturity. At the time of issue, the market rate of interest for a similar instrument is 14%. Interest is payable every six months on January 1 and July 1.
On July 1, 2020, the entire debt instrument was converted into equity instrument by the issuance of 80,000 ordinary shares of the enterprise. Transaction costs of P,50,000 were incurred in relation to the issue of new shares. Round of PV factors to three decimal places.
Required -
1. Prepare the amortization table for the bond.
2. Prepare the necessary journal entries over the life of the bond.
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