Question 14

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On January 1, 2020, Ivanhoe Corporation issued $4 million of 10year, 9% convertible debentures at 108. Investment bankers believe that the debenture would have sold at 104 without the conversion privilege. Interest is to be paid semi-annually on June 30 and December 31. Each $1,000 debenture can be converted into 4 common shares of Ivanhoe after December 31, 2021. On January 1, 2022, $220,000 of debentures are converted into common shares, and on March 31, 2022, an additional $220,000 of debentures are converted into common shares. Fair value of Ivanhoe's common shares is $111 and $116 per share on January 1, 2022, and March 31, 2022, respectively. Accrued interest at March 31 will be paid on the next interest date. Bond premium is amortized on a straight-line basis. Ivanhoe follows ASPE.