Journal Entry Assignment | Custom Assignment Help
August 26th, 2019
Question:ABC sold $350,000 of 5% (annual interest payments) convertible 5 year bonds
at par. The market interest rate on the sale date was 7%. Each $1,000 bond was convertible into 20 shares of KER Ltd. no-par value common shares on any interest date after the end of the first year from the date of issuance.
Required:
Using IFRS, prepare the journal entry at issuance using the proportional method. Assume that the option pricing model placed a value of $73,675 for the conversion feature.