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incurred issue cost of shs. 100,000 . The bonds are redeemable after three years at...

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Accounting

incurred issue cost of shs. 100,000 . The bonds are redeemable after three years at a premium of \( 10 \% \). Similar bonds in the market with conversion option have an effective interest rate of \( 12 \% \). Required i. Determine the cash proceeds, liability component and the equity component of the bond (4 marks) ii. Prepare income statement extract and statement of financial position extract to show how the above transaction will be recorded over the three years( 4 Marks)
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incurred issue cost of shs. 100,000. The bonds are redeemable after three years at a premium of 10%. Similar bonds in the market with conversion option have an effective interest rate of 12%. Required i. Deterz (4ma ii. Prepare meome statement extract and statement of financial position extract to show how the above transaction will be recorded over the three years ( 4 Marks)

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