Convertible Bond: Bond is a financial instrument used by a company to raise funds. The convertible bond is a bond which has the clause that a bondholder can change the bonds into a specified number of shares in the common stock of the issuing company whenever the holder wants. Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts. Accounting rules for journal entries: To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains. To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains. To prepare: The journal entry to record the issuance of the convertible bonds.

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Chapter 15, Problem 15.3IFRS

To determine

Convertible Bond: Bond is a financial instrument used by a company to raise funds. The convertible bond is a bond which has the clause that a bondholder can change the bonds into a specified number of shares in the common stock of the issuing company whenever the holder wants.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: The journal entry to record the issuance of the convertible bonds.

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