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1. On January 1, 2020, XYZ Corporation issued P5,000,000, 14%, nonconvertible bonds with detachable share purchase warrants. Each P1,000 bond carried 25 detachable share purchase warrants, each of which called for 1 a share of ABC ordinary share, par P30, at the specified option price of P35 per share. At the time of issue, interest rate effective in the market of the bonds including the share purchase warrants is 11%. The bond was dated January 1, 2020 and will mature on December 31, 2029. The quoted price of the bonds ex warrant cannot be determined reliably on the date of issue however, the market interest rate of the nonconvertible bonds without the share option privilege is 12%. Interest payment shall be made every January 1. Determine the issue price of the compound financial instruments.Assuming that the bondholder exercises 50% of the share purchase warrants on December 31, 2024, determine the amount of increase in equity upon exercising the option by the bondholders. (Use 4-decimal PVF, round off final answer to whole number, use separator and ignore currency sign)

2. On January 1, 2020, ABC Corporation issued P5,000,000, 12%, convertible bonds. The privilege allows the holder the right to convert the liability instrument into 25 ordinary shares with P25 par value for every P1000 convertible bond, with minimum cash out of P2 per share. The quoted market price of the bonds including the conversion feature cannot be determined reliably on this date but the effective interest rate of these instruments with the privilege is 10%. It requires payment of interest every January 1 starting 2021 until its maturity on January 1, 2028. The quoted price of the bonds ex privilege cannot be determined reliably as well however; the market interest rate of the bonds ex-privilege is 13% at the date of issue. If 60% of the bonds payable were retired on January 1, 2023 at P102. At this time, the quoted price of the convertible bonds ex-conversion privilege is 96. As a result of the retirement. Determine the amount of gain or loss associated with the conversion privilege to be shown under equity. (Use 4-decimal PVF, round off final answer to whole number, use separator and ignore currency sign)

3. On January 1, 2020, ABC Corporation issued P2,000,000, 10%, nonconvertible bonds with detachable share purchase warrants. Each P1,000 bond carried 20 detachable share purchase warrants, each of which called for a share of ABC ordinary share, par P50, at the specified option price of P60 per share. The bonds are sold at 103, and the detachable share purchase warrants were immediately quoted at P5 each on the market. The bond was dated January 1, 2020 and will mature on January 1, 2025. The quoted price of the bonds ex warrant is 101 on the date of issue. Interest payment shall be made every January 1. Determine the carrying value of the liability component on December 31, 2021 if ABC uses straight-line method to unwind the resulting premium/discount. (Use 4-decimal PVF, round off final answer to whole number, use separator and ignore currency sign)

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