Question
Daisy Inc. issued $6 million of 10-year, 9% convertible bonds on June 1, 2020, at 98 plus accrued interest. The bonds were dated April 1,
Daisy Inc. issued $6 million of 10-year, 9% convertible bonds on June 1, 2020, at 98 plus accrued interest. The bonds were dated April 1, 2020, with interest payable April 1 and October 1. Bond discount is amortized semi-annually. Bonds without conversion privileges would have sold at 97 plus accrued interest.
On April 1, 2021, $1.5 million of these bonds were converted into 30,000 common shares. Accrued interest was paid in cash at the time of conversion. Assume that the company follows IFRS.
Prepare the entry to record the issuance of the convertible bonds on June 1, 2020.
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