A Company Issues Convertible Bonds with Face Value of $5,000,000

question 36

Essay

A company issues convertible bonds with face value of $5,000,000 and receives proceeds of $6,500,000. Each $1,000 bond can be converted, at the option of the holder, into 80 common shares. The underwriter estimated the market value of the bonds alone, excluding the conversion rights, to be approximately $6,300,000.
Required:
Record the journal entry for the issuance of these bonds based on IFRS.

---

Definitions:

Secondary Sources

Materials that interpret, analyze, or summarize information from primary sources, such as books, articles, or documentaries.

Persuasive Messages

Communications intended to convince or influence the audience to take a specific action or adopt a particular viewpoint.

Writing Approach

The method or style adopted by a writer to convey their message or tell a story.

Close of Proposal

The final section of a proposal document where the summary and call-to-action are presented, aiming to persuade the reader.