SOLVE THE FOLLOWING CASES INDEPENDENTLY.

CASE 1 On December 31, 2020, MIS Co. issued 5,000 of its 8% 10-year P1,000 face value bonds with detachable warrants at 110. Each bond carried a detachable warrant for 10 ordinary shares of MIS Co.'s P100 par value at a specified option price of P120. Immediately after issuance, the market value of the bonds without warrants was P4,800,000 and the market value of the warrants ws P1,200,000. In December 31, 2020 statement of financial position, what amount should MIS report as bonds payable?

CASE 2 On January 1, 2020, DEP Co. issues convertible bonds with a maturity of five years. The issue is for a total of 1,000 convertible bonds. Each bond has a par value of P1,000, a stated interest rate of 5% per year, and is convertible into 5 ordinary shares of DEP. The convertible bonds were issued to DEP at par. The per-share price of DEP's share P15. Quotation for similar bonds issued by DEP without the conversion privilege suggest that they can be sold for P900,000

. 1. The issuance of convertible bonds increased DEP's equity by

a. 100,000

b. 75,000

c. 76,923

d. zero

2. The carrying amount of bonds payable on DEP's books as of December 31, 2020 is

CASE 3 On January 1, 2020, GEN Co converted its 12%, P1,500,000 face value bonds payable with carrying amount of P1,552,049 for 20,000 ordinary shares with par value of P50. The bonds were originally issued to yield 10%. The fair value of the bonds on the date of retirement is P1,600,000. Assume that the bonds are convertible bonds and the share premium from conversion option was P60,000.

1. How much is the gain (or loss) on conversion of the bonds to be recognized in the profit or loss during the period? Assume instead that the bonds are nonconvertible and the transaction happen because of equity swap.

2. How much is the gain (or loss) on conversion of the bonds to be recognized in the profit or loss during the period?

CASE 4 On January 1, 2019, COT Co. issued P1,500,000, 12% convertible bonds due after 4 years. The bonds were sold for P1,595,082 and are convertible into P10 par ordinary shares at a conversion price of P25 per share.

On December 31, 2020, COT Co. in an effort to induce conversion of the bonds into ordinary share, reduced the conversion price to P20 per share for bondholders that converted within 40 days. On this date, the fair value of the bonds is P1,600,000 and the bonds have a carrying amount of P1,552,049.

All the bond holders accepted the offer on December 31, 2020. On the date of conversion, the fair value of the COT Co.'s ordinary share is P30 per share.

How much is the amount to be recognized in profit or loss as a result induced conversion?

CASE 5 On December 31, 2020, TAC Co. had an outstanding 12%, P5,000,000 face value bonds maturing on December 31, 2025. Interest was payable semiannually every June 30 and December 31. On December 31, 2020, after amortization was recorded for the period, the unamortized bond discount and bond issue cost were P500,000 and P300,000, respectively. On that date, TAC acquired all its outstanding bonds on the open market at 98 and retired them. At December 31, 2020, what amount should TAC recognized as pretax loss on early extinguishment of bonds?