On September 30, 2023, Sunland Inc. issued $3,170,000 of 10-year, 8% convertible bonds for $3,613,800. The bonds pay interest on March 31 and September 30 and mature on September 30, 2033. Each $1,000 bond can be converted into 80 no par value common shares. In addition, each bond included 20 detachable warrants. Each warrant can be used to purchase one common share at an exercise price of $15. Immediately after the bond issuance, the warrants traded at $3 each. Without the warrants and the conversion rights, the bonds would have been expected to sell for $3,296,800. On March 23, 2026, half of the warrants were exercised. The common shares of Sunland were trading at $20 each on this day. Immediately after the payment of interest on the bonds, on September 30, 2028, all bonds outstanding were converted into common shares. Assume the entity follows IFRS. (a) Prepare the journal entry to record the issuance of the bonds on September 30, 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 O for the amounts List all debit entries before credit entries.) Date Account Titles and Explanation September 30, 2023 Debit Credit
On September 30, 2023, Sunland Inc. issued $3,170,000 of 10-year, 8% convertible bonds for $3,613,800. The bonds pay interest on March 31 and September 30 and mature on September 30, 2033. Each $1,000 bond can be converted into 80 no par value common shares. In addition, each bond included 20 detachable warrants. Each warrant can be used to purchase one common share at an exercise price of $15. Immediately after the bond issuance, the warrants traded at $3 each. Without the warrants and the conversion rights, the bonds would have been expected to sell for $3,296,800. On March 23, 2026, half of the warrants were exercised. The common shares of Sunland were trading at $20 each on this day. Immediately after the payment of interest on the bonds, on September 30, 2028, all bonds outstanding were converted into common shares. Assume the entity follows IFRS. (a) Prepare the journal entry to record the issuance of the bonds on September 30, 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 O for the amounts List all debit entries before credit entries.) Date Account Titles and Explanation September 30, 2023 Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
Transcribed Image Text:On September 30, 2023, Sunland Inc. issued $3,170,000 of 10-year, 8% convertible bonds for $3,613,800. The bonds pay interest on
March 31 and September 30 and mature on September 30, 2033. Each $1,000 bond can be converted into 80 no par value common
shares. In addition, each bond included 20 detachable warrants. Each warrant can be used to purchase one common share at an
exercise price of $15. Immediately after the bond issuance, the warrants traded at $3 each. Without the warrants and the conversion
rights, the bonds would have been expected to sell for $3,296,800.
On March 23, 2026, half of the warrants were exercised. The common shares of Sunland were trading at $20 each on this day.
Immediately after the payment of interest on the bonds, on September 30, 2028, all bonds outstanding were converted into common
shares. Assume the entity follows IFRS.
(a)
Prepare the journal entry to record the issuance of the bonds on September 30, 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 O for
the amounts List all debit entries before credit entries.)
Date Account Titles and Explanation
September
30, 2023
Debit
Credit
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