What is the entry on january to record the issuance

Reference no: EM132700706

On january 1 20x1 an entity issues bonds with face amount of P 5 000 000 for P 5 200 000. The bonds mature on December 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 P 200. On January 1 20x1 the bonds are selling at 101 without the conversion features. the effective interest rate on the bonds is 11.59%. All of the bonds are converted into ordinary shares on january 1 20x3.

Requirements:

Problem a. what is the entry on january 1 20x1 to record the issuance of the convertible bonds.

Problem b. what is the entry on january 1 20x3 to record the conversation of the bonds.

Reference no: EM132700706

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