On January 1, 2019, BC corp. issued $1,200,000 of five-year zero interest bearing notes along with warrants to buy 100,000 common shares at $20 per share. On January 1, 2019 BC corp. had 9,600,000 shares outstanding and the market price was $19 per share. BC co. received $1,000,000 for the notes and warrants. If offered alone, on January 1, 2019 the notes would have been issued to yield 12% to the creditor. Assume that the company follows IFRS.

Instructions:

1. Prepare the journal entries to record the issuance of the notes and the warrants for the cash consideration that was received on Jan 1, 2019
2. Prepare the amortization table for the note using effective interest rate
3. Prepare the journal entries for BC co. at Dec 31, 2019 assuming it is year end.
4. If 30% of the warrants were exercised at Jan 1, 2021, what journal entry (s) required to record the transaction.