Question
On 1 November 2021, Brisbane Ltd issued 10,200 convertible notes with the following features: Face value $1,000 Term 4 years Issue price At face value
- On 1 November 2021, Brisbane Ltd issued 10,200 convertible notes with the following features:
| Face value | $1,000 |
| Term | 4 years |
| Issue price | At face value |
| Interest | The coupon rate of 11 per cent payable annually in arrears |
| Conversion option | Each note is convertible into 102 ordinary shares |
| Market interest rate | 13 per cent for similar debt with no conversion option |
- Prepare the journal entry to record the issue of the convertible notes following the requirements under AASB 139 and AASB 9.
- Describe the effect, if any, of the issue of the convertible notes on each of the three components of the statement of financial position, that is, assets, liabilities and equity
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Advanced Accounting
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
11th Edition
978-0132568968, 9780132568968
