On December 31, 2012, Tree Company issued 5,000 of its 12% P1,000 face value bonds at 110. The bonds contain a conversion privilege that provides an exchange of a P1,000 bond for 10 shares of Tree’s ordinary shares with par value of P100. It is reliably estimated that the bonds would sell only at 98 without the conversion privilege. What is the increase in stockholders’ equity on December 31, 2012, as result of the issuance of the compound financial instrument?
On December 31, 2012, Tree Company issued 5,000 of its 12% P1,000 face value bonds at 110. The bonds contain a conversion privilege that provides an exchange of a P1,000 bond for 10 shares of Tree’s ordinary shares with par value of P100. It is reliably estimated that the bonds would sell only at 98 without the conversion privilege. What is the increase in stockholders’ equity on December 31, 2012, as result of the issuance of the compound financial instrument?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 31, 2012, Tree Company issued 5,000 of its 12% P1,000 face
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