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.

---

Definitions:

Influence Tactic

Strategies used by individuals or groups to change the behavior or attitudes of others in a particular direction.

Political Skill

The ability to effectively understand others at work and use such knowledge to influence others to act in ways that enhance one's personal or organizational objectives.

Sources of Power

The origins from which an individual or organization derives the ability to influence others, such as through expert knowledge, authority, or social relationships.

Compliance

The act of conforming to set rules, standards, or laws.