It's perfectly clear. I've checked on multiple devices. I don't know what exactly you are looking for. It's readable on a laptop, cell phone and tablet. I reposted it with my attempt. I was hoping "an expert" was capable of answering.

Crane Inc., a publicy accountable enterprise that reports in accordance with IFRS, issued convertible bonds for the first time on January 1, 2020. The $1 million of six-year, 10% (payable annually on December 31, start December 31, 2020), convertible bonds were issued at 108. The bonds would have been issued at 98 without a conversion feature, and yielded a higher rate of return. The bonds are convertible at the investor's option The company's bookkeeper recorded the bonds at 108 and, based on the $1,080,000 bond carrying value, recorded interest expense using the effective interest method for 2020. He prepared the following amortization table, believing that the yield was 8%: Cash Interest Effective Interest Premium Carrying Amount Date (10%) (9%) Amortization of Bonds Jan. 1, 2020 $1,080,000 Dec. 31, 2020 $100,000 $86,400 $13,600 1,066,400 You were hired as an accountant to replace the bookkeeper in November 2021. It is now December 31, 2021, the company's year end, and the CEO is concerned that the company's debt covenant may be breached. The debt covenant requires Crane to maintain a maximum debt to equity ratio of 2.3. Based on the current financial statements, the debt to equity ratio would be 2.6. The CEO recalls hearing that convertible bonds should be reported by separating out the liability and equity components, yet he does not see any equity amounts related to the bonds on the current financial statements. He has asked you to look into the bond transactions record and make any necessary adjustments. He would also like you to explain how any adjustments that you make affect the debt to equity ratio. Determine the amount that should have been reported in the equity section of the statement of financial position at January 1, 2020, for the conversion right, considering that the company must comply with IFRS. Amount to be reported Prepare the journal entry that should have been recorded on January 1, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation January 1, 2020 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Using (1) a financial calculator or (2) Excel functions, calculate the effective rate (yield rate) for the bonds. (Round answer to 5 decimal places, e.g. 2.57000%.) Effective rate SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Prepare a bond amortization schedule from January 1, 2020, to December 31, 2024, using the effective interest method and the corrected value for the bonds. (Round answers to 0 decimal pla Schedule of Bond Discount Amortization Effective Interest Method Effective Discount Interest Amort. Cash Paid Carrying Amount Date Jan 1, 2020 Dec. 31, 2020 Dec. 31, 2021 Dec 31, 2022 Dec. 31, 2023 Dec 31, 2024 Dec. 31, 2025 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Prepare the journal entry dated January 1, 2021, to correct the bookkeeper's recording errors in 2020. Ignore income tax effects. (Credit account Litles are automatically indented when the amount is entered. D not indent manually. Round answers to 0 decimal places, e.g. 5,275.) Debit Credit Date Account Titles and Explanation January 1, 2021 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Prepare the journal entry at December 31, 2021, for the interest payment on the bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275.) Debit Credit Date Account Titles and Explanation December 31, 2021 SHOW LIST OF ACCOUNTS STANDARD VIEW PRINTER VERSION Problem 16 7 Crane Inc., a publicy accountable enterprise that reports in accordance with IFRS, issued convertible bonds for the first time on January 1, 2020. The $1 million of six-year, 10% (payable annually on December 31, starting December 31, 2020), convertible bonds were issued at 108. The bonds would have been issued at 98 without a conversion feature, and yielded a higher rate of return. The bonds are convertible at the investor's option. The company's bookkeeper recorded the bonds at 108 and, based on the $1,080,000 bond carrying value, recorded interest expense using the effective interest method for 2020. He prepared the following amortization table, believing that the yield was 8%: Cash Interest Effective Interest Premium Carrying Amount Date (10%) (8% ) Amortization of Bonds Jan. 1, 2020 $1.080.000 Dec 31, 2020 $100,000 $86,400 $13,600 1,066,400 You were hired as an accountant to replace the bookkeeper in November 2021. It is now December 31, 2021, the company's year end, and the CEO is concerned that the company's debt covenant may be breached. The debt covenant requires Crane to maintain a maximum debt to equity ratio of 2.3. Based on the current financial statements, the debt to equity ratio would be 2.6. The CEO recalls hearing that convertible bonds should be reported by separating out the liability and equity components, yet he does not see any equity amounts related to the bonds on the current financial statements. He has asked you to look into the bond transactions recorded and make any necessary adjustments. He would also like you to explain how any adjustments that you make affect the debt to equity ratio. Your answer is partially correct. Try again. Determine the amount that should have been reported in the equity section of the statement of financial position at January 1, 2020, for the conversion right, considering that the company must comply with IFRS. Amount to be reported 1000000 Prepare the journal entry that should have been recorded on January 1, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation January 1, 2020 Cash 1080000 T Bonds Payable 980000 T Contributed Surplus - T 100000 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Using (1) a financial calculator or (2) Excel functions, calculate the effective rate (yield rate) for the bonds. (Round answer to 5 decimal places. 0.0.2.57000%.) Effective rate 10.46550 SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT LINK TO TEXT Your answer is correct. Prepare a bond amortization schedule from January 1, 2020, to December 31, 2024, using the effective interest method and the corrected value for the bonds. (Round answers to 0 decimal places, e.. 5.275.) Schedule of Bond Discount Amortization Effective Interest Method Effective Discount Interest Amort. Cash Carrying Amount Date Paid 980000 1 100000 102562 982562 100000 102630 985392 Jan 1, 2020 Dec 31, 2020 Dec. 31, 2021 Dec 31, 2022 Dec. 31, 2023 Dec 31, 2024 Dec 31, 2025 100000 103125 988518 100000 103453 34531 991971 100000 --- 103815 T 3815 995786 1000001 104214 4214 1000000 600000 620000 20000 Prepare the journal entry dated January 1, 2021, to correct the bookkeeper's recording errors in 2020. Ignore income tax effects. (Credit account titles are automatically indented when the amount is entered. not indent manually. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit January 1, 2021 Interest Expense 102562 Bonds Payable 2562 Interest Payable 100000 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. Prepare the journal entry at December 31, 2021, for the interest payment on the bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.) Debit Credit Date Account Titles and Explanation December 31, 2021 Interest Expense 102830 Bonds Payable 2830 Interest Payable 100000 SHOW LIST OF ACCOUNTS