Tri-Facet Ltd. issued 1,500, 10-year convertible bonds on January 1, 2021. Each bond had a face value of $1,000. The convertible bonds were issued at a price of 103. The bonds pay interest at a rate of 5% each January 1. The bonds were convertible to common shares at a rate of 5 common shares per bond. The bonds without the conversion option would normally sell at 101. On August 1, 2023, 500 of the bonds were converted into common shares. At the time of conversion, the total unamortized bond premium was $ 11,760. No other bonds were converted into common shares prior to August 1, 2023. Tri-Facet Ltd. follows IFRS.

Required :

1. Prepare the journal entry to account for the issuance of the convertible bonds on January 1, 2021.

2. Prepare the journal entry for the conversion of 500 of the bonds into common shares on August 1, 2023. Ignore the impact of accrued interest on the bonds converted to common shares.

3. Assume that Tri-Facet Ltd. follows ASPE instead of IFRS. Identify 2 options for accounting for the issuance of the convertible bonds on January 1, 2021. Prepare the journal entry required for each option.