On January 1, 2020, when the fair value of its common shares was $78per share,IvanhoeCorp. issued $11million of9% convertible debentures due in 20 years. The conversion option allowed the holder of each $1,000bond to convert the bond into6common shares. The debentures were issued for $11.6million. The bond payment's present value at the time of issuance was $9.2million and the corporation believes the difference between the present value and the amount paid is attributable to the conversion feature. On January 1, 2021, the corporation's common shares were split3for1, and the conversion rate for the bonds was adjusted accordingly. On January 1, 2022, when the fair value of the corporation's common shares was $149per share, holders of28% of the convertible debentures exercised their conversion option.IvanhoeCorp. applies ASPE, and uses the straight-line method for amortizing any bond discounts or premiums.

On January 1, 2020. when the fair value of its common shares was $73 per share. Ivanhoe Corp. issued $11 million of 9% convertible debentures due in 20 years. The conversion option allowed the holder of each $1,000 bond to convert the bond into 6 common shares.The debentures were issued for $11.6 million.The bond pavment's present value at the time of issuance was $9.2 million and the corporation believes the difference between the present value and the amount paid is attributable to the conversion feature. On January 1, 2021. the corporation's common shares were split 3 for 1, and the conversion rate for the bonds was adjusted accordingly. [in January 1. 2022, when the fair value of the corporation's common shares was $149 per share, holders of 28% of the convertible debentures exercised their conversion option. Ivanhoe Corp. applies ASPE. and uses the straight-line method for amortizing any bond discounts or premiums. Prepare the entry to record the original issuance of the convertible debentures. {Cmditaocount titles are automatically indented men the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Ca 5h l 9200000 I ' Bonds Payable l l l l Contributed Surplus - Conversion Rights | l Using the book value method, prepare the entry to record the exercise of the conversion option. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Bonds Payable Preferred Shares Common SharesHow many shares were issued as a result of the conversion? Number of shares issued sharesAssume, instead, that Ivanhoe Corp. decides to retire the bonds early, on January 1, 2022, by paying cash of $3,360,800 to the bondholders. On that date, the fair value of a similar bond without the conversion feature is $860 per bond. Prepare the journal entry using the book value method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Retained Earnings Bonds Payable Cash Contributed Surplus - Conversion Rights Unrealized Holding Gain - Futures Contract