Question $1$ of $5$

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On January $1,2023,$ Pharoah Ltd$.$ issued $9605-$year, $9\%$ convertible bonds at par of $$1,000,$ with interest payable each December $31.$

Each bond is convertible into $100$ common shares, and the current fair value of each common share is $$6.$ Similar straight bonds carry

an interest rate of $11\%.$

Click here to view the factor table.

Calculate the PV of the debt component by itself. Calculate using any of the following methods: $(1)$ factor tables, $(2)$ a financial

calculator, or $(3)$ Excel function PV$.($For calculation purposes, use $5$ decimal places as displayed in the factor table provided.

Round answers to $0$ decimal places, e$.$g$.5,275.)$

PV of the debt component $

How should Pharoah record the issuance if it follows IFRS? Use the amount you arrived at in the above part using a financial

calculator or Excel. $($Credit account titles are automatically indented when the amount is entered. Do not indent manually.

If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Round answers to $0$ decimal

places, e$.$g$.5,275.$ List all debit entries before credit entries.$)$

Date Account Titles and Explanation

Debit

Credit

January $1$

How should Pharoah record the issuance if it follows ASPE? $($Credit account titles are automatically indented when the

amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for

the amounts. List debit entry before credit entry.$)$

Date

Account Titles and Explanation

Debit

Credit

January $1$