Record the issue of the convertible notes

Assignment Help Accounting Basics
Reference no: EM132534658

Question - Sampras Ltd issued $20 million of convertible notes on 1 July 2020. The notes have a life of 6 years and a face value of $20 each. Annual interest of 5% is payable at the end of each year. The notes were issued at their face value and each note can be converted into one ordinary share in Sampras Ltd at any time over their lives. Organisations with a similar risk profile to Sampras Ltd have issued debt with similar terms but without the option to convert at the rate of 7% per annum. 

Required -

a) Identify the present value of the notes and calculate the equity component of the convertible notes;

b) Provide the appropriate accounting entries to record i) the issue of the convertible notes; ii) the first payment of interest; iii) the conversion of convertible notes into shares on 30 June 2021.

Reference no: EM132534658

Questions Cloud

Policy analysis paper : You will create a practical and professional document that will represent the level of work that is expected from modern professional policy analysts
Provide the necessary journal entries for the disposal : Required - Provide the necessary journal entries for the disposal of the machinery and the acquisition of the motor vehicle on 1 July 2019
What advice would law firm to proceed fairly and profitably : Thus they must begin assessing value-added to client firm of legal expertise and assistance. What advice would give a law firm to proceed fairly and profitably?
What is the adjusting entry for bad debt : At the end of 20X9, Spend Co has accounts receivable of $70,000, of which it estimates 5% will be bad debt. What is the adjusting entry for bad debt
Record the issue of the convertible notes : Record i) the issue of the convertible notes; ii) the first payment of interest; iii) the conversion of convertible notes into shares on 30 June 2021
Identify and discuss current best practices : Identify and discuss current best practices. Address the importance of basing case management on current evidence. Identify and evaluate published guidelines.
Draw and display a histogram for each of the two variables : Draw and display a histogram for each of the two variables using appropriate BIN values from part (b) and comment on the shape of the two distributions
Enterprise risk management : Design and implement an appropriate ERM framework and risk governance structure customized to any type of organization.
Describe the three designs : Describe the three designs and when is it appropriate to use each design? What specific methods are related to each of these designs?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Johnston co cleans and applies powder coat paint to metal

johnston co cleans and applies powder coat paint to metal items on a job-order basis. johnston has budgeted the

  Memofax inc produces memory enhancement kits for fax

memofax inc. produces memory enhancement kits for fax machines. sales have been very erratic with some months showing a

  Matador inc sells computer monitor screens the direct labor

matador inc. sells computer monitor screens. the direct labor dl rate includes wages benefits and payroll tax. direct

  What is garner direct-labor price variance

Actual direct-labor hours 34,500 hours. Standard direct-labor hours 35,000 hours. What is Garner's direct-labor price (or rate) variance

  Prepare the income statement statement of changes in

Talley Inc. experienced the following events in 2016, in its first year of operation: Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for the 2016 accounting period.

  Recording non-quantitative journal entries

Recording Non-quantitative Journal Entries The following is a series of accounts for Cohen & Sons Consulting, owned and managed by Alan Cohen.

  Cost-volume-profit analysis

Cost-Volume-Profit Analysis:Mitchell Corp. expects to sell all the goods manufactured this year and has no beginning inventory of its one product. The estimated fixed costs for the year are $288,000; and estimated variable costs per unit are $14.00. ..

  Which of these two asset groups is more significant

Complete the vertical analysis by computing each line item (a) (e) as a percentage of total assets. Round to the nearest whole percentage. What percentages of Electronic Arts assets relate to intangibles versus property and equipment? Which of these ..

  Determine amount of overhead assigned to each product line

Suppose Keller uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line

  Schedule of cash collections sugarland company sells a

schedule of cash collections sugarland company sells a single product and anticipates opening a new facility in

  What was oaks edge sales price variance

Actual sales were 21,750 units at $79 per unit. What was Oaks Edge sales price variance

  What was the amount of merchandise returned to vendors

Analyze: What was the amount of merchandise returned to vendors by Old Tech Medical Devices in June

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd