Problem 7-3 (IFRS) At the beginning of current year, Zamboanga Company issued P8,000,000 of 12% bonds payable maturing in 5 years. December 31 The bonds include share warrants giving the bondholder the share within the next three years. The bonds and warrants were issued at 120. The value of the warrants at the time of issuance was P1,500,000. All share warrants were exercised at current year-end. The market rate of interest for similar bonds without the warrants is 10%. The PV of 1 at 5% for ten periods is .61, and the PV of an ordinary annuity of 1 at 5% for ten periods is . Required: Prepare journal entries for the currrent year in connection with the bonds. The interest method of amortization is used. Problem 7-4 (IFRS) At the beginning of current year, Silay Company issued 2,000 convertible bonds. The bonds have a three-year term and are issued at 110 with a face amount of P1,000 per bond, giving total proceeds of P2,200,000. Interest is payable annually in arrears at a nominal annual interest rate of 6%. Each bond is convertible at any time up to maturity into 25 shares of capital with par value of P20. The bonds are converted at the end of current year. When the bonds are issued, the prevailing market rate for similar bonds without conversion privilege is 9%. The present value of 1 at 9% for three periods is 0.77 and the present value of an ordinary annuity of 1 at 9% for three periods is 2.53. Required: Prepare journal entry to record issuance of the bonds. interest payment, effective amortization and bond conversion