On January 1 2020 lakes limited a private company which follows ASPE standards issued 8 year 200000$ face value 6% bonds at par (interest pay able annually on January 1?. each 1000$ bond is convertible into 30 Lakes common shares none of the bonds have been converted as of the end of 2021. the present value of the bond without a conversion options is 173159$ at the time issuance and the difference is allocated to the conversion feature.
On January 1 2022 100% of the holders of lakes, s convertible bonds converted their bonds to shares, when lakes's shares were trading at 58 per share. The bond's fair value at the time of conversion was 179969. lakes offers an additional premium of 300$ to bondholders to convert the bond.
a. Prepare journal entry Lakes would have made on January 1 2020 to record the issuance of the bonds.
b. prepare the journal entries to record the conversion
c. how many shares were issued at the time of conversion.

Answer rating: 100% (QA)

Answer a Lakes Limited would have recorded the issuance of the bonds on January 1 2020 as follows De... View the full answer