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:

Central

Central refers to something that is of primary importance or located at the middle or core of something.

Somatic

Relating to or affecting the body, especially as distinguished from the mind or consciousness.

Parasympathetic

Pertaining to the part of the autonomic nervous system that conserves physical resources and slows down heart rate.

Axon

The part of the neuron that carries information away from the cell body toward other cells.