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l Acc Re. BAC 306 TMA 22x 100% Question 1 Jet Bhd has 8% convertible...

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l Acc Re. BAC 306 TMA 22x 100% Question 1 Jet Bhd has 8% convertible loan stocks that have a value of RM1.000 per unit. 1,000 units were issued at RM1,000 per unit on 1 July 2017. The loan stocks are convertible to ordinary shares or redeemable in cash at RM1,000 per unit in three years from the date of issue. The directors had decided to issue the convertible loan stocks because non-convertible loan stocks would have required an interest rate of 10%. The directors intend to show the loan at RM1 million under non-current liabilities. The following discount factors are available: 8% 0.93 0.86 0.79 10% 0.91 0.83 0.75 Year Required: Explain whether or not the convertible loan stocks can be classified as non- current liability a. (3 marks) Analyse the convertible loan stocks into their relevant components for initial recognition b

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