Lux SA issued convertible bonds. At the start of the last year, the carrying amount of the liability component is 935,000; the effective interest rate is 7 % and the coupon paid at the end of the year is 50,000. The original equity component is 118,000 (case data). At maturity, all the holders convert. Rule of the standard: the liability is reclassified to equity at its carrying amount and the original component stays in equity. Calculate the carrying amount of the liability on conversion, then the total equity attributable to the instrument after conversion.
- Carrying amount of the liability at the start of the last year
- 935,000
- Effective interest rate
- 7 %
- Coupon paid at year end
- 50,000
- Original equity component
- 118,000