On September 30, 2020, Sunland Inc. Issued $3,750,000 of 10-year, 8% convertible bonds for $4.306.000. The bonds pay interest on March 31 and September 30 and mature on September 30, 2030, 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 $2.90 each. Without the warrants and the conversion rights, the bonds would have been expected to sell for $3,947,000. On March 23, 2023, half of the warrants were exercised. The common shares of Sunland Inc. were trading at $20 each on this day Immediately after the payment of interest on the bonds, on September 30, 2025, all bonds outstanding were converted into common shares. Assume the entity follows IFRS. Your answer is correct. Prepare the journal entry to record the issuance of the bonds on September 30, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually) Date Account Titles and Explanation September 30, 2020 Cash Bonds Payable Debit 4306000 Credit 3947000 ENG 1812 2052-2022 Your answer is incorrect. Using (1) a financial calculator or (2) Excel functions, calculate the effective rate (yield rate) for the bonds. (Round answer to 4 decimal places, eg. 5.2500%) Semi-annual effective rate eTextbook and Media List of Accounts 30031 % Your answer is partially correct Prepare a bond amortization schedule from September 30, 2020, to September 30, 2025, using the effective interest rate. (Round answers to O decimal places, eg. 5,275) Schedule of Bond Premium Amortization Effective Interact Method ING Cath Effective Premium Carrying Paid Interest Amortized Amount 150000 1185331 31467 3947000 3915533 150000 117588 32412 3883122 150000 116615 33385 3849737 150000 115612 34388 3815349 150000 114580 35420 3779929 150000 113516 36484 3743445 150000 112420 37580 3705866 150000 111292 38706. 3667158 150000 110129 39871 3627287 Prepare the December 31, 2020 year-end adjusting journal entries and the payment of interest on March 31, 2021. Assume that Sunland Inc. does not use reversing entries. For amortization of premium, pro-rate using number of months. (Credit account titles are automatically indented when the amount is entered. Do not Indent manually. Round answers to 0 decimal places, eg. 5,275.) Date Account Titles and Explanation December 31, 2020 Interest Expense Bonds Payable Interest Payable March 31, 2021 Interest Expense Interest Payable Bonds Payable Cash 0 Debit 59267 15733 59267 75000 15733 Credit 75000 150000 ENG eb Your answer is partially correct. Prepare the journal entry to account for the exercise of the warrants on March 23, 2023. (Credit account titles are automatically Indented when the amount is entered. Do not indent manually. Round answers to O decimal places, eg 5,275) Date Account Titles and Explanation March 23, Cash 2023 Contributed Surplus-Stock Warrants Common Shares How many common shares were issued in this transaction? Common shares issued shares Debit Credit Your answer is partially correct. Prepare the journal entry to account for the bond redemption on September 30, 2025. (Credit account titles are automatically Indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation September Bonds Payable 30, 2025 Contributed Surplus-Conversion Rights Common Shares eTextbook and Media List of Accounts Debit Credit * Your answer is incorrect. How many shares were issued on September 30, 2025? Shares issued shares Calculate the minimum market value of the common shares as of the date of the conversion, September 30, 2025. (Round answer to 2 decimal places, eg. 52.75) Minimum market value $ eTextbook and Media List of Accounts Attempts: 1 of 3 used Submit