A Company Issues Convertible Bonds with Face Value of $10,000,000

question 5

Essay

A company issues convertible bonds with face value of $10,000,000 and receives proceeds of $10,500,000. Each $1,000 bond can be converted, at the option of the holder, into 800 common shares. The underwriter estimated the market value of the bonds alone, excluding the conversion rights, to be approximately $8,300,000.
Required:
Record the journal entry for the issuance of these bonds based on IFRS.

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Definitions:

Qualities

Characteristics or attributes that can be used to describe or evaluate something or someone.

Social Readjustment Rating Scale

A scale that measures the stressfulness of life events to predict the impact of stress on health.

Major Life Changes

Significant events or transitions in an individual's life that can have profound psychological and emotional impact, such as marriage, divorce, or loss of a loved one.

Stressors

External pressures or events that cause stress, challenging an individual's ability to cope and potentially affecting their well-being.