1.) On December 31, 2020, Tazmania Company showed the following balances: Bonds payable, 6,000,000; Discount on Bonds payable 750,000; Share premium issuance, 7,500,000; and Share premium conversion privilege 700,000. The interest is payable annually every December 31. The convertible bonds are not converted but fully paid on December 31, 2020. On such date, the quoted price of the convertible bonds with conversion option is 105 which is the payment to the bondholders plus interest. However, the quoted price of the bonds without the conversion privilege is 95. What is the gain or loss from extinguishment of bonds?

a. 450,000 gain

b. 1,050,000 loss

c. 450,000 loss

d. 1,050,000 gain

2.) On December 31, 2020, George Company was experiencing financial difficulties and entered into a debt restructuring agreement with the creditor. The creditor restructured the obligation as follows: The principal was reduced from P20,000,000 to P18,000,000. Forgave the accrued interest of P2,400,000. Extended the maturity date from Dec. 31, 202014 to Dec. 31, 2023. Reduced the interest from 12% to 10%. Interest is payable annually on December 31, 2021, 2022, and 2023.The prevailing rate of interest for a similar debt instrument as of December 31, 2020 is 11%.How much should be the creditor report as loss on debt restructuring? *

a. 4,842,800

b. 3,908,400

c. 5,289,920

d. 0

3.) Leslie Company was organized on January 2, 2018 at which date it issued 400,000 shares of P20 par ordinary share at P30 per share. During the period January 2, 2018 to December 31, 2020, Leslie reported Net Income of P1,800,000 and paid cash dividends of P920,000. On January 2, 2020, Leslie purchased 24,000 of its ordinary share at P24 per share. On December 31, 2020, Leave sold 16,000 treasury shares at P16 per share, What is the total shareholders equity at December 31, 2020? *

a. 12,304,000

b. 12,560,000

c. 12,880,000

d. 13,800,000