On September $30,2023,$ Sunland Inc. issued $$3,170,000$ of $10-$year, $8\%$ convertible bonds for $$3,613,800.$ The bonds pay interest on March $31$ and September $30$ and mature on September $30,2033.$ Each $$1,000$ bond can be converted into $80$ no par value common shares. In addition, each bond included $20$ detachable warrants. Each warrant can be used to purchase one common share at an exercise price of $$15.$ Immediately after the bond issuance, the warrants traded at $$3$ each. Without the warrants and the conversion rights, the bonds would have been expected to sell for $$3,296,800.$

On March $23,2026,$ half of the warrants were exercised. The common shares of Sunland were trading at $$20$ each on this day.

Immediately after the payment of interest on the bonds, on September $30,2028,$ all bonds outstanding were converted into common shares. Assume the entity follows IFRS.

$($a$)$

Prepare the journal entry to record the issuance of the bonds on September $30,2023.($Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter O for the amounts List all debit entries before credit entries.$)$

Date Account Titles and Explanation

September

$30,2023$