A Company Issues Convertible Bonds with Face Value of $7,000,000

question 21

Essay

A company issues convertible bonds with face value of $7,000,000 and receives proceeds of $8,500,000. Each $1,000 bond can be converted, at the option of the holder, into 100 common shares. The underwriter estimated the market value of the bonds alone, excluding the conversion rights, to be approximately $7,300,000.
Required:
Record the journal entry for the issuance of these bonds based on IFRS.

Understand the concepts of reliability and validity in research methodology.

Grasp the basic tenets of social psychology and its approach to understanding human behavior.

Comprehend the self-correcting nature of science and its implications for research.

Understand the concept and calculation of present value and its application in evaluating future cash flows.

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Definitions:

pH

A scale used to specify the acidity or basicity of an aqueous solution, with low values indicating acidity and high values, basicity.

Solutions

Homogeneous mixtures composed of two or more substances where one substance, the solute, is dissolved in another, the solvent.

Proton

A subatomic particle found in the nucleus of an atom, possessing a positive electrical charge.