Company A issued $6 million of 10-year, 9% convertible bonds on January 1, 20X7 at 98 . Interest is paid semi annually on June 30 and December 31. Bonds without conversion privileges would have sold at 97

June 30

Dr Interestexpense275,600

Cr Cash270,000

Cr BP5,600

Can you tell me why the journal entry is like that?

Another question.(Type of Lease, Lessee Entries with Purchase Option) The following facts are for a non-cancellable lease agreement between Hebert Corporation and Russell Corporation, a lessee:

Inception date July 1, 2017 Annual lease payment due at the beginning of each year, starting July 1, 2017 $20,066.26 Purchase option price at end of lease term reasonably certain to be exercised by Russell $4,500.00 Lease term 5 years Economic life of leased equipment 10 years Lessor's cost $60,000.00 Fair value of asset at July 1, 2017 $88,000.00 Lessor's implicit rate 9% Lessee's incremental borrowing rate 9%

The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties about costs that have not yet been incurred by the lessor. The lessee assumes responsibility for all executory costs. Both Russell and Hebert use IFRS 16.

Instructions Answer the following, rounding all numbers to the nearest cent. (a) Calculate the amount of the right-of-use asset and lease liability. (b) Discuss the nature of this lease to Russell Corporation, the lessee. (c) Discuss the nature of this lease to Hebert Corporation, the lessor. (d) Prepare lease amortization schedule for the lease obligation using a computer spreadsheet for Russell Corporation for the five-year lease term. (e) Prepare the journal entries on the lessee's books to refl ect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2017 and 2018. Russell's annual accounting period ends on December 31, and Russell does not use reversing entries.

For the question above, change the purchase option to: GRV (and this equals the amount expected to be paid) URV Required: Using both ASPE and IFRS prepare the journal entries for the period ended December 31, 2020 for the lessee. Using both ASPE and IFRS prepare the journal entries for the period ended December 31, 2020 for the lessor.