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.

Determine the weight of preferred stock and debt in the firm's capital structure for WACC computation.

Understand and describe the principles of classical conditioning, including acquisition, generalization, discrimination, and extinction.

Explain the principles and processes of operant conditioning, including reinforcement, punishment, shaping, and extinction.

Describe the role of cognitive factors in learning, such as attention, awareness, expectations, and latent learning.

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Definitions:

Sarbanes-Oxley Act

United States federal law enacted in 2002 to protect investors from fraudulent accounting activities by corporations, including stringent record-keeping requirements.

Chief Executive Officer

The highest-ranking executive in a company or organization, responsible for making major corporate decisions, managing overall operations, and acting as the main point of communication between the board of directors and corporate operations.

Electing Board Members

The process by which individuals are chosen or voted into a board of directors, typically by shareholders or members of the organization, to serve and make decisions on its behalf.

Board-centered Executives

Executives who prioritize the governance and leadership role of the board of directors in guiding the organization's strategic direction and ensuring its accountability.