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.

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Definitions:

Restricted Control

Restricted control refers to limitations placed on the autonomy or freedom of individuals or organizations, often for regulatory or safety purposes.

Preventive Stress Management

A strategy aimed at reducing stress levels through proactive measures and stress resilience-building techniques.

Goal Setting

The process of identifying something that you want to accomplish and establishing measurable objectives and timeframes to help you achieve it.

Role Conflict

A situation in which an individual experiences clash or incompatibility between expectations or responsibilities associated with different roles they play.