On December 31, 2021, Glimmer Company had outstanding P3,000,000 8% convertible bonds that mature on December 31,

Intermediate Accounting: Reporting And Analysis
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Chapter16: Retained Earnings And Earnings Per Share
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Problem 26E: Tama Companys capital structure consists of common stock and convertible bonds. At the beginning of...
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On December 31, 2021, Glimmer Company had outstanding P3,000,000 8% convertible bonds that mature on December 31, 2023. Interest is payable annually every December 31 and each P1,000 bond is convertible into 30 ordinary shares with a P20 par value per share. The unamortized discount was P200,000 and the equity component when the bonds were sold was P700,000. On the same date, 1,200 bonds were converted when the fair value of Glimmer’s share was P40.

What amount of share premium should Glimmer recognize as a result of the conversion?

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