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A Company Issues Convertible Bonds with Face Value of $5,000,000

question 82

Essay

A company issues convertible bonds with face value of $5,000,000 and receives proceeds of $6,500,000.Each $1,000 bond can be converted,at the option of the holder,into 80 common shares.The underwriter estimated the market value of the bonds alone,excluding the conversion rights,to be approximately $6,300,000.
Requirement:
Record the journal entry for the issuance of these bonds based on IFRS.


Definitions:

Conceive

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Controling

The act of directing or regulating the behavior or operations of something or someone.

Unwrapped

Exposed or revealed by removing a covering.

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Advisory suggestions provided to guide decisions or propose certain actions.

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