What is the balance of the unamortized premium on debt

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On January 1, 2016 Grader Company issued its 10%, 4 year convertible debt instrument with a face amount of Php 4,ooo,000 for Php 4,400,000. Interest is payable every December 31 of each year. The debt instrument is convertible into 35,000 ordinary shares with a par value of Php 100. When the debt instruments were issued, the prevailing market rate of interest for similar debt without conversion option is 8% (Carry PV factors up to 3 decimal places)

Required:

Problem 1: How much of the total proceeds represents the equity component?

Problem 2: What is the balance of the unamortized premium on debt instrument as of December 31, 2016?

Reference no: EM132746264

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