A Company Issues Convertible Bonds with Face Value of $10,000,000

question 27

Essay

A company issues convertible bonds with face value of $10,000,000 and receives proceeds of $10,500,000.Each $1,000 bond can be converted,at the option of the holder,into 800 common shares.The underwriter estimated the market value of the bonds alone,excluding the conversion rights,to be approximately $8,300,000.
Requirement:
Record the journal entry for the issuance of these bonds based on IFRS.

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Definitions:

Behavioral Outcomes

The observable behaviors or actions that result from interventions, treatments, or environmental conditions, often used to assess the effectiveness of a specific intervention or treatment.

Sociocultural Theory

The approach that emphasizes how cognitive development proceeds as a result of social interactions between members of a culture.

Cognitive Development

The process of growth and change in intellectual capabilities that occurs throughout childhood and adulthood, influencing how one understands the world.

Humanistic Perspective

The theory contending that people have a natural capacity to make decisions about their lives and control their behavior.