Brock Company issued $100,000 convertible 5-year bonds with a face value of $100,000 on January 1, 20X0. The coupon rate on the bonds was 6%, and Brock received $100,000 cash for the bonds. Interest is paid semiannually. The market rate for similar bonds without a conversion factor was 10%. Each $1,000 bond is convertible into 20 shares of Brock Company common stock. At the time of issue of the bonds, Brock common stock sold for $42 per share.
1. How would Brock Company report the issuance of the bonds using U.S. GAAP?
2. How would Brock Company report the issuance of the bonds using IFRS?