A Company Issued 105,000 Preferred Shares and Received Proceeds of $7,000,000

question 51

Essay

A company issued 105,000 preferred shares and received proceeds of $7,000,000. These shares have a benchmark value of $50 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 $63 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.

Account for foreign exchange implications on international transactions.

Distinguish between the accounting treatments for trading securities, available-for-sale securities, and held-to-maturity debt securities.

Understand the impact of sample size and sample diversity on the reliability of point estimates.

Identify various sampling methods and their appropriate applications.

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