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Question 19 3 pts Bohan Co issued 10 million convertible loan notes on 1 October 2021 that carry a nominal interest (coupon) rate of
Question 19 3 pts Bohan Co issued 10 million convertible loan notes on 1 October 2021 that carry a nominal interest (coupon) rate of 5% per annum. They are redeemable on 30 September 2024 at par for cash or can be exchanged for equity shares in Bohan Co on the basis of 20 shares for each 100 of loan. A similar loan note, without the conversion option, would have required Bohan Co to pay an interest rate of 8%. The present value of 1 receivable at the end of each year, based on discount rates of 5% and 8%, can be taken as: 5% 8% End of year 1 0.95 0.93 2 0.91 0.86 3 0.86 0.79 Cumulative 2.72 2.58 If Bohan Co had incurred a total transaction costs of 15,000 in issuing these loan notes, how should this 15,000 have been accounted for? O Charged 5,000 to finance costs Amortised 5,000 for the loan notes Added 15,000 to the proceeds of the loan notes O Deducted 15,000 from the proceeds of the loan notes
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