Provide entries to record the conversion of the bonds

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Question - Convertible bonds- conversion - On Jan 1,20x1, an entity issues bonds with face amount of P5,000,000 for 5,200,000. The bonds mature on Dec 31,20x3 and pay annual interest of 12%. The bonds can be converted into 10,000 ordinary shares of the entity with par value per share of P200. On Jan 1,20x1, the bonds are selling at 101 without the conversion feature. The effective interest rate on the bonds is 11.59%. All of the bonds are converted into ordinary shares on Jan 1, 20x3.

Provide entries to record the following:

a. Issuance of the convertible bonds

b. Conversion of the bonds.

Reference no: EM133013775

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