On September Sunland Inc. issued $ of year, convertible bonds for $ The bonds pay interest on March and September and mature on September Each $ bond can be converted into no par value common shares. In addition, each bond included detachable warrants. Each warrant can be used to purchase one common share at an exercise price of $ Immediately after the bond issuance, the warrants traded at $ each. Without the warrants and the conversion rights, the bonds would have been expected to sell for $
On March half of the warrants were exercised. The common shares of Sunland were trading at $ each on this day.
Immediately after the payment of interest on the bonds, on September 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 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
