Francine Ltd. is a public corporation and issues $200,000 8% convertible three-year bonds for $224,000. Each $2,000 bond is convertible at the option of the investor into 20 no-par value common shares of Francine Ltd. on maturity. At the date of issue, similar type non-convertible bonds of Francine Ltd. are selling for $204,000. The above bonds are issued by Francine Ltd. during the year ending December 31, 2018. REQUIRED: a) Indicate how convertible debt is initially recognized for accounting purposes, and explain your reasoning. (

Prepare the journal entry to record the issuance of the bonds