mium arising 306, b. 162,000 al with par yable with ates of the titled the any with 000,000 100 per 500,000 had a zed by apital? 300,000 Problem 7-17 (IAA) Isabel Company had outstanding share capital with par value of P50,000,000 and 12% convertible bonds payable with face amount of P10,000,000. Interest on the bond is payable December 31. on annually The conversion clause entitled the bondholders to receive 50 shares of P20 par value in exchange for each P1,000 bond. At year-end, the holders of bonds with face amount of P2,000,000 exercised the conversion privilege. The market price of the bonds on that date was P1,200 per bond and the market price of the share was P25. The premium on bonds payable at the date of conversion was P3,000,000. The share premium from conversion privilege had a balance P1,500,000 at the date of conversion. What amount of share premium should be recognized by reason of the bond conversion? a. 450,000 b. 300,000 c. 600,000 d. 900,000 249 7-14