helpQuestion $1$

Idris Holdings issues $6,000$ convertible bonds at $1$ January $2020.$ The bonds have a three year life, and are issued at par with a face value of RM$1,000$ per bond, giving total proceeds of RM$6,000,000.$ Interest is payable annually at $6$ percent. Each bond is convertible into $250$ ordinary shares. When the bonds are issued, the market rate of interest for similar debt without the conversion option is $8\%.$ The amortization table listed below.

$\backslash$table$[[6\%$ Bond Discounted AT $8\%],[$ Date ${?}_{(}),$ Cash Paid ${?}_{(}),$ Interest Expense ${?}_{(}),$ Discount Amortized ${?}_{(}),\backslash$table$[[$Carrying Amount$],[$of Bonds$]],,,],[\frac{1}{1}\frac{?}{11},,,,5,691,720,,,],[\frac{12}{31}\frac{?}{11},360,000,455,{337\mathrm{.}6}_{?},95,{337\mathrm{.}6}_{?},5,787,057\mathrm{.}6,,,],[\frac{12}{31}\frac{?}{12},360,000,462,{964\mathrm{.}6}_{?},102,{964\mathrm{.}6}_{?},5,890,022\mathrm{.}2,,,],[\frac{12}{31}\frac{?}{13},360,000,471,{201\mathrm{.}8}_{?},111,{201\mathrm{.}8}_{?},6,000,000,,,]]$

Instructions

$($a$)$ Compute the liability and equity component of the convertible bond on $1$ January $2020.$

$(2$ marks$)$

$($b$)$ Prepare the journal entry to record the conversion on $1$ January $2021.$

$(4$ marks$)$

$($c$)$ Assume that the bonds were repurchased on $1$ January $2021,$ for RM$5,910,000$ cash instead of being converted. The net present value of the liability component of the convertible bonds on $1$ January $2021,$ is RM$5,850,000.$ Prepare the journal entry to record the repurchase on $1$ January $2021.$

$(6$ marks$)$