Sunland Inc. issued $$3$ million of $10-$year, $9\%$ convertible bonds on June $1,2023,$ at $98$ plus accrued interest. The bonds were dated April $1,2023,$ with interest payable April $1$ and October $1.$ Bond discount is amortized semi$-$annually. Bonds without conversion privileges would have sold at $97$ plus accrued interest.

On April $1,2024,$ $$0\mathrm{.}75$ million of these bonds were converted into $15,000$ common shares. Accrued interest was paid in cash at the time of conversion. Assume that the company follows IFRS.

$($a$)$

Prepare the entry to record the issuance of the convertible bonds on June $1,2023.($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 $0$ for the amounts. Round answers to $0$ decimal places, e$.$g$.5,275.$ List all debit entries before credit entries.$)$

$\backslash$table$[[$Date Account Titles and Explanation$],[$June $1,2023$ Cash$],[$Bonds Payable$],[$Interest Payable$],[$Contributed Surplus $-$ Conversion Rights$]]$

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Assistance Used

Prepare the entry to record the interest expense at October $1,2023,$ by pro$-$rating the number of months. Start by calculating the effective rate on the bonds using $(1)$ a financial calculator or $(2)$ Excel functions. Assume that interest payable was credited when the bonds were issued. $($Credit account titles are automatically indented when the amount is entered. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Do not indent manually. Round effective interest rate to $4$ decimal places, e$.$g$.3\mathrm{.}5275\%$ and final answers to $0$ decimal places, e$.$g$.5,275.$ List all debit entries before credit entries.$)$

Date Account Titles and Explanation

Debit

Credit

October

$1,2023$