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Dear Sirs, greeting
I hope you help me like usual in the below question with simple explanation.
Thank you in Advance . . .
Question 11. On 1 March 20X1 an enterprise issues 3,000 convertible $100 bonds ( a compound instrument) at par.
interest is payable annually in arrears at 7%. The prevailing market rate of interest at the date of issue is 9%. The bonds are redeemable on 28 February 20X4.What is the equity component of the instrument calculated under IAS 32 ?
NIL
$151,940
$2,848,060
$3000,000This is not the full question! The examiner always gives you the discount factors!
By the application of the correct discount factors (and these will be different from those given by the examiner because he only gives discount factors to 2 decimal places) it seems to me that the answer is option b) $151,940
Technically correctly it should be (if my guesswork is correct about the missing information) $151,880
3,000 x $100 = $300,000 so NONE of the options that you have listed can possibly be correct
Your question must be either 30,000 x $100 or 3,000 x $1,000
Either way, you’ve typed it incorrectly and caused me more work! Please make sure in future that you type the question correctly, exactly as it is written and also give me full information!
Dear Mr. Mike , I am really sorry to disturb you every time; I confirm that the full question was written here and it’s from real past exam , I know from that ACCA might be mistaken in this question and some body should inform them.
Thanks , appreciated your kind support
Mr. Mike, sorry I just noticed your reply now , actually I don’t have the exam date I just get some questions from one of my friends, it seems this is not in F7 exam it’s part of DipIFR or some thing like that.
Sorry to bother you every-time and many thanks for your support.
Thanks
Regards
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