Current Attempt in Progress

On September $30,2023,$ Blossom Inc. issued $\backslash (\backslash$$ $3,320,000\backslash )$ of $10-$year, $\backslash (8\backslash \%\backslash )$ convertible bonds for $\backslash (\backslash$$ $3,818,000\backslash ).$ The bonds pay interest on March $31$ and September $30$ and mature on September $30,2033.$ Each $\backslash (\backslash$$ $1,000\backslash )$ bond can be converted into $80$ no par value common shares. In addition, each bond included $20$ detachable warrants. Each warrant can be used to purchase one common share at an exercise price of $\backslash (\backslash$$ $15\backslash ).$ Immediately after the bond issuance, the warrants traded at $\backslash (\backslash$$ $3\backslash )$ each. Without the warrants and the conversion rights, the bonds would have been expected to sell for $\backslash (\backslash$$ $3,486,000\backslash ).$

On March $23,2026,$ half of the warrants were exercised. The common shares of Blossom were trading at $\backslash (\backslash$$ $20\backslash )$ each on this day.

Immediately after the payment of interest on the bonds, on September $30,2028,$ all bonds outstanding were converted into common shares. Assume the entity follows IFRS.

$($a$)$

Your answer is correct.

Prepare the journal entry to record the issuance of the bonds on September $30,2023.($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 Ofor the amounts List all debit entries before credit entries.$)($b$)$

Correct Answer $($Used$)$

Using $(1)$ a financial calculator or $(2)$ Excel functions, calculate the effective rate $($yield rate$)$ for the bonds. $($Round answer to $4$ decimal places, e$.$g$.5\mathrm{.}2500\backslash \%.)$

Effective rate Prepare a bond amortization schedule from September $30,2023,$ to September $30,2028,$ using the effective interest rate. $($Round answers to $0$ decimal places, e$.$g$.5,275.)$