Refer to BE16-12. Assume that Bantry Capital Ltd. follows IFRS and recorded the issuance of the bonds

Question:

Refer to BE16-12. Assume that Bantry Capital Ltd. follows IFRS and recorded the issuance of the bonds and warrants accordingly. On a date when the bonds had a carrying value of $489,100, Bantry paid $14,000 to the bondholders to induce early conversion. Record the conversion using the book value method.

Data From BE16-12:

Bantry Capital Ltd. issued 500 $1,000 bonds at 103. Each bond was issued with 10 detachable stock warrants. After issuance, similar bonds were sold at 97, and the warrants had a fair value of $2.50. (a) Record the issuance of the bonds and warrants assuming that Bantry Capital follows IFRS. (b) Assuming that Bantry Capital follows ASPE, discuss the two options available to record the issuance of the bonds and warrants, and prepare the journal entry for each option.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-1119048541

11th Canadian edition Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy

Question Posted: