Problem $11-18($Algo$)($LO $11-9)$

Assume that a foreign company using IFRS is owned by a company using U$.$S$.$ GAAP. Thus, IFRS balances must be converted to U$.$S$.$ GAAP to prepare consolidated financial statements. Ignore income taxes.

Izmir A$.$S$.$ issued convertible bonds at their face value of $121,000$ lira on December $31,2020.$ The bonds have a $8-$year life with interest of $13$ percent payable annually. At the date of issue, the prevailing interest rate for similar debt without a conversion option was $15$ percent.

Required:

a$.$ Prepare journal entries for this compound financial instrument for the year ending December $31,2020,$ under $(1)$ IFRS and $(2)$ U$.$S$.$ GAAP.

b$.$ Prepare the entry$($ies$)$ that the U$.$S$.$ parent would make on the December $31,2020,$ conversion worksheet to convert IFRS balances to U$.$S$.$ GAAP.

Complete this question by entering your answers in the tabs below.

Prepare journal entries for this compound financial instrument for the year ending December $31,2020,$ under $(1)$ IFRS and $(2)$ U$.$S$.$ GAAP. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Round PV factor to $7$ decimals. Round your intermediate and final answers to nearest whole dollar.$)$