X uses ASPE and on January 1, 2021, issued 10-year convertible bonds with face value of $5,000,000 for $6,600,000. Each $1,000 bond can be converted at the option of the holder into 40 common shares. Each bond is also issued with ten warrants. Each warrant gives the holder the right to purchase five shares at a strike price of $20 per share. Similar warrants were being traded on the market at $6 each. The underwriter estimated the market value of the bonds alone, excluding conversion rights, to be 102. Interest is paid on January 1 and June 30.

On July 1, 2023, X converted 60% of the bonds described above. [a] How many shares would the company issue and what amounts would the company record for [b] Bonds Payable, [c] Contribution Surplus - Conversion Rights and [d] Common Share Capital in the required journal entry to record the transaction?

a.[a] 200,000 shares; [b] $5,100,000; [c] $1,200,000; [d] $6,300,000.

b.[a] 120,000 shares; [b] $3,045,000; [c] $720,000; [d] $3,765,000.

c.[a] 80,000 shares; [b] $3,045,000; [c] $720,000; [d] $3,765,000.

d.[a] 80,000 shares; [b] $2,030,000; [c] $480,000; [d] $2,510,000.

e.None of the above.