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mike when we have suppose the option of converting the loan stock to share, we do
Dr Loan Stock 50
Dr Equity option 10
Cr Share captial 20
Cr Share premium 40 (bal Fig)According to the question if the holder does not convert we had to pay 50 and the interest have been paid, now suppose he doesnt exercise the option
so we do
Dr Loan stock 50
Dr Equity option 10
Cr Cash 60The problem is how does the issuer pay 60 in cash when he has to pay 50 and anyway he has already paid the interest so it shouuld be 50. Where do we Dr the equity option as we have to remove it
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