On September 30, 2020,SandhillInc. issued $4,400,000of 10-year,7% convertible bonds for $5,020,000. 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 $13. Immediately after the bond issuance, the warrants traded at $3.20each. Without the warrants and the conversion rights, the bonds would have been expected to sell for $4,610,000.

On March 23, 2023, half of the warrants were exercised. The common shares ofSandhillInc. were trading at $20each 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.

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.) - 4 entries

Using (1) a financial calculator or (2) Excel functions, calculate the effective rate (yield rate) for the bonds.(Round answer to 4 decimal places, e.g. 5.2500%.)

Semi-annual effective rate -------

a bond amortization schedule from September 30, 2020, to September 30, 2025, using the effective interest rate.(Round answers to 0 decimal places, e.g. 5,275.)

Schedule of Bond Premium Amortization

Effective Interest Method, CashPaid, EffectivePremium,CarryingAmount, Premium Amortized

Sept. 30, 2020$

Mar. 31, 2021$$$

Sept. 30, 2021

Mar. 31, 2022

Sept. 30,2022

Mar. 31,2023

Sept. 30,2023

Mar. 31,2024

Sept. 30,2024

Mar. 31,2025

Sept. 30,2025

Prepare the December 31, 2020 year-end adjusting journal entries and the payment of interest on March 31, 2021. Assume thatSandhillInc. 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, e.g. 5,275.)

Date

Account Titles and Explanation

Debit

Credit

December 31, 2020 - 3 entries

March 31, 2021 - 4 entries

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 0 decimal places, e.g. 5,275.)

Date

Account Titles and Explanation

Debit

Credit

March 23, 2023 - 3 entries

How many common shares were issued in this transaction?

Common shares issued ------