million, 8%, 10-year convertible bond with On January 1, 2017. King Co issued a $8 million 8% 10-year convertible bor annual coupon payments. Each $1.000 bond was convertible into 25 sha $1,000 bond was convertible into 25 shares of King's common shares. Prince Investments purchased the entire bond issue of 0. million on January 1, 2017. King estimated that without the conversion feature bonds would have sold for $7,508,435 (to yield 10%). On January 1, 2019, Prince converted bonds with a par value of $4 million of conversion, the shares were selling at $45 each. Required: a) Prepare the journal entry to record the issuance of the convertible bonds. Assuming both companies use IFRS.(3 Marks) b) Prepare the possible journal entries for issuance of the Bonds if both companies uses ASPE. (5 Marks) c) Prepare an effective interest amortization schedule for the period January 1, 2017-January 1, 2019 (date of conversion) Calculate the Book value of the Bonds at January 1, 2019 and prepare the journal entry to record the conversion according to IFRS (book value method). (8 Marks) million, 8%, 10-year convertible bond with On January 1, 2017. King Co issued a $8 million 8% 10-year convertible bor annual coupon payments. Each $1.000 bond was convertible into 25 sha $1,000 bond was convertible into 25 shares of King's common shares. Prince Investments purchased the entire bond issue of 0. million on January 1, 2017. King estimated that without the conversion feature bonds would have sold for $7,508,435 (to yield 10%). On January 1, 2019, Prince converted bonds with a par value of $4 million of conversion, the shares were selling at $45 each. Required: a) Prepare the journal entry to record the issuance of the convertible bonds. Assuming both companies use IFRS.(3 Marks) b) Prepare the possible journal entries for issuance of the Bonds if both companies uses ASPE. (5 Marks) c) Prepare an effective interest amortization schedule for the period January 1, 2017-January 1, 2019 (date of conversion) Calculate the Book value of the Bonds at January 1, 2019 and prepare the journal entry to record the conversion according to IFRS (book value method). (8 Marks)
