What amount should be reported as total share premium

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Question - Quest Company is threatened with bankruptcy due to its inability to meet interest payment and fund requirements to retire P6,000,000 note payable with accrued interest payable P600,000.

The entity has entered into an agreement with the creditor to exchange equity instrument for the liability.

The terms of the exchange are 300,000 ordinary shares with P5 par value and P10 market value, and 25,000 preference shares with P10 par value and P60 market value.

Required -

1. What amount should be reported as gain on the extinguishment of the note payable?

2. What amount should be reported as total share premium from the issuance of the preference and ordinary shares?

Reference no: EM133131693

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