On 26 March 2020, SIA announced7 a proposed renounceable rights issue of (i) new ordinary shares in the capital of SIA and (ii) mandatory convertible bonds (MCBs), with a ten-year maturity and zero-coupon feature, to its shareholders to raise gross proceeds of approximately S$8.8 billion. For item (i), up to 1,777,692,487 rights shares was expected to be issued at an issue price of S$3.00 for each rights share on the basis of three rights shares for every two existing ordinary shares held by SIAs shareholders. The gross proceeds expected from the issue of these rights shares was approximately S$5.3 billion. For item (ii), up to S$3.5 billion aggregate principal amount of rights MCBs was expected to be issued in the denomination of S$1.00 for each rights MCB, on the basis of 295 rights MCBs for every 100 existing ordinary shares held by SIAs shareholders. On maturity date, the accreted outstanding principal amount of the rights MCBs would be convertible into fully paid-up new shares based on the estimated conversion price of S$4.84. (Hint: Will this be convertible into fixed or variable number of new shares?) Pre-maturity date, SIA would have the option to redeem these MCBs, in whole, or in part, on every six-month anniversary of the issue date at the relevant accreted principal amount as at such date. The relevant accreted principal amount would be calculated on the basis that the annual yield to call for the first four years from the date of issue of the rights MCBs is 4% per annum, and the subsequent three years is 5% per annum and the subsequent three years is 6% per annum, compounded on a semi-annual basis. This rights issue was approved at an extraordinary general meeting (EGM) held on 30 April 2020

Question: prepare the journal entries, where possible, at the point of issuance and in subsequent financial years. Where values are used in your journal entries, clearly indicate the assumptions undertaken in estimating those values