Sandhill inc. has $4 million of 9% convertible bonds outstanding. Each $1000 bond is convertible into 40 no par value common shares. The bonds pay interest on January 31 and July 31. On July 31,2020, the holders of $1,200,000 of these bonds exercised the conversion privilege. On that date, the market price of the bonds was 114, the market price of the common shares was $30, the carrying value of the common shares was $15, the contributed surplus- conversions rights account balance was $469,000. The total unamortized bond premium at the date of conversion was $195,000. The remaining bonds were never converted and were retired when they reached the maturity date. Assume that the company follows IFRS.

1)-Assume that the book value method was used, record the conversion of the $1,200,000 of bonds on July 31,2020.

Date. A/C titles. Dr. Cr.

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2)- prepare the journal entry that would be required for the remaining amount in Contributed Surplus- Conversion Rights when the maturity of the remaining bonds is recorded.

A/C titles. Dr. Cr.

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