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What california should record gain on conversion of

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Reference no: EM132577935

Question 1: California, Inc. had outstanding 10%, P1 million face value, convertible bonds maturing on December 31, 2017 on which interest is paid June 30 and December 31.

After amortization through June 30, 2015, the unamortized balance in the bond discount account was P30, 000. The paid in capital from bond conversion privilege had a balance P50, 000.On that date, all of these bonds were converted into 40,000 ordinary shares with P20 par value. At that time, each share of California ordinary share capital sells for P23. California incurred expenses of P10, 000 in connection with the conversion.

The conversion of the bonds to ordinary shares shall result to an increase in share premium by

a. P 160,000

b. P 170,000

c. P 180,000

d. P 210,000

Question 2: Use the same information given in 1. Recording the conversion in accordance with current financial reporting standards, California should record gain on conversion of

a. P 60,000

b. P 50,000

c. P 40,000

d. P 0

Reference no: EM132577935

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