On January 1, 2021, Portside Co. issued a $10 million, 8%, nine-year convertible bond with annual coupon payments. Each $1,000 bond was convertible into 25 shares of Portside’s common shares. Starboard Investments purchased the entire bond issue for $10.2 million on January 1, 2021. Portside estimated that without the conversion feature, the bonds would have sold for $9,400,475 (to yield 9%).

On January 1, 2023, Starboard converted bonds with a par value of $4 million. At the time of conversion, the shares were selling at $45 each. 

Required: 

a. Prepare the journal entry to record the issuance of the convertible bonds. 

b. Prepare the journal entry to record the conversion according to IFRS (book value method).