On January 1, 2019, Braeburn Corporation, a food processing company, granted 15,000 options to three key executives (5,000 options each). Each option allows the executives to purchase one share of Braeburn's common shares at a price of $40 per share. The options were exercisable within a two-year period beginning January 1, 2021, if the grantees were still employed by the company at this time. On the grant date, Braeburn's shares were trading at $35 per share, and a fair value options pricing model determined total compensation to be $120,000. Management has assumed that there will be no forfeitures because they do not expect any of the key executives to leave.

In addition, on January 1, 2021, Braeburn issued a 10-years $500,000 face value, 6% bonds at par (interest payable annually on January 1. Each $1,000 bond is convertible into 20 Braeburn common shares.

On May 1, 2021, 12,500 of the options from the executive compensation plan were exercised when the market price of Braeburn's shares was $42 per share. The remaining 2,500 options lapsed at the end of 2022 because one executive decided not to exercise all of their options. Management was indeed correct in their assumption regarding forfeitures in that all executives remained with the company.

None of the bonds have been converted as of the end of 2021.

Finally, the company uses a uses a large quantity of apples in its product lines. To ensure that the cost of apples is known, on December 2, 2021, the company enters into executory contracts where it agrees to take delivery of predetermined quantities of applies at predetermined prices in the future.

Assume that Braeburn follows IFRS. Instructions

1.1 Prepare the necessary journal entries related to the stock option plan for 2019, 2020, 2021 and 2022.

1.2 Prepare the journal entries Braeburn should make in 2021 in regards to the bond (Hint: Both January 1st and December 31st). The market rate of similar debt without the conversion option would by 8%.

1.3 Explain/describe how Braeburn should account for the contract for apples assuming the company follows IFRS. Would your answer change and how, if Braeburn was not planning to take possession of the apples?