A Company Issued 75,000 Preferred Shares and Received Proceeds of $7,000,000

question 42

Essay

A company issued 75,000 preferred shares and received proceeds of $7,000,000. These shares have a benchmark value of $80 per share and pay cumulative dividends of 6%. Buyers of the preferred shares also received a detachable warrant with each share purchased. Each warrant gives the holder the right to buy one common share at $35 per share within 10 years.
The underwriter estimated that the market value of the preferred shares alone, excluding the conversion rights, is approximately $90 per share. Shortly after the issuance of the preferred shares, the detachable warrants traded at $5 each.
Required:
Record the journal entry for the issuance of these shares and warrants under IFRS.

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Definitions:

Satisfaction

The feeling of pleasure or contentment that arises from the fulfillment of desires, expectations, or needs.

Therapist

A professional trained to provide psychological treatment and support, often specializing in specific areas such as cognitive behavioral therapy or psychoanalysis.

Psychotherapy

A form of treatment for mental health issues using psychological methods, typically involving verbal communication.

Psychiatrists

Medical doctors specialized in diagnosing, treating, and preventing mental illnesses, often with the ability to prescribe medication.