On September 1, 2010, Lin Company sold at 104 (plus accrued interest) 30,000 of its 8%, 10-year,

Question:

On September 1, 2010, Lin Company sold at 104 (plus accrued interest) 30,000 of its 8%, 10-year, ¥10,000 face value, non-convertible bonds with detachable share warrants. Each bond carried two detachable warrants. Each warrant was for one ordinary share at a specified option price of ¥1,500 per share. The net present value of bonds is determined to be ¥290,000,000. Interest is payable on December 1 and June 1.

Instructions

Prepare in general journal format the entry to record the issuance of the bonds.

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...