Chapter 14, Problem 14.15E

a.

To determine

The issue price of the bond as per IFRS.

Given information:

Company issued bonds worth $850,000.

Term period for conversion is 6 years

Interest is payable semi-annually each January 1 and July 1.

Market rate of interest is 10%.

Effective rate of interest is 8%.

b.

To determine

To prepare: The amortization table for the bond issue as per IFRS.

c.

To determine

To prepare: The journal for recording the required entries on the date of issue.

d.

To determine

To prepare: The journal for recording conversion of bond at the end of third year as on January 1, 2021.