Transformational Airlines issued several convertible bonds on January 1, 2021. Each bond is convertible into a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Transformational Airlines issued several convertible bonds on January 1, 2021. Each bond is convertible into a specified number of common shares. The bonds pay interest on lanuary 1 and July 1 of each year. On July 2, 2022, some of the bondholders decided to exercise the conversion privilege. Other information regarding the bonds follows: $ 5,822,000 Par value of convertible bonds issued Price at which convertible bonds issued 101 5% Bond coupon rate Similar bonds without the conversion privilege would have been issued at the following price: Face value of bonds converted to common shares by bondholders on July 2, 2022 Unamortized bond discount on July 2, 2022 Market price of convertible bonds on July 2, 2022 96 1,455,500 58,220 104 No other bondholders converted their bonds common shares prior to July 2, 2022. Transformational Airlines follows IFRS. Required: 1 Prepare the journal entry for the issuance of the bonds on January 1, 2021. (2.5 marks) 2 Prepare the Journal entry for the conversion of the bonds on July 2, 2022. (5.5 marks) 3. Assume that Transformational Airlines follows ASPE Identify the 2 methods that can be used to account for the issuance of the bonds on January 1, 2021, and prepare the Journal entry required for each method. (2 marks) Transformational Airlines issued several convertible bonds on January 1, 2021. Each bond is convertible into a specified number of common shares. The bonds pay interest on lanuary 1 and July 1 of each year. On July 2, 2022, some of the bondholders decided to exercise the conversion privilege. Other information regarding the bonds follows: $ 5,822,000 Par value of convertible bonds issued Price at which convertible bonds issued 101 5% Bond coupon rate Similar bonds without the conversion privilege would have been issued at the following price: Face value of bonds converted to common shares by bondholders on July 2, 2022 Unamortized bond discount on July 2, 2022 Market price of convertible bonds on July 2, 2022 96 1,455,500 58,220 104 No other bondholders converted their bonds common shares prior to July 2, 2022. Transformational Airlines follows IFRS. Required: 1 Prepare the journal entry for the issuance of the bonds on January 1, 2021. (2.5 marks) 2 Prepare the Journal entry for the conversion of the bonds on July 2, 2022. (5.5 marks) 3. Assume that Transformational Airlines follows ASPE Identify the 2 methods that can be used to account for the issuance of the bonds on January 1, 2021, and prepare the Journal entry required for each method. (2 marks)
Expert Answer:
Answer rating: 100% (QA)
1 Journal entry for insurance of bond Face value of the bond 1000 Pa... View the full answer
Related Book For
Financial reporting, financial statement analysis and valuation a strategic perspective
ISBN: 978-0324789416
7th Edition
Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw
Posted Date:
Students also viewed these accounting questions
-
Prepare the Journal Entry for the information below: Order $40,000 (by 12/31 current supplies are all used), GOB shipping with 2/10/net 60 (shipped 12/29, received 1/3, and paid for on 1/15)
-
Prepare the Journal Entry for the given information: Re-estimate that the furniture is expected to have only a 4 year total UL , with no salvage value. Physical count shows 4% of all discs are...
-
Prepare a journal entry for the purchase of office equipment on office supplies on August 7 for $4,000, paying $1,000 cash and the remainder on account.
-
Find the smallest positive angle and the smallest negative angle (numerically) coterminal with but not equal to the given angle. 47.0
-
You have been asked to determine if two different production processes have different mean numbers of units produced per hour. Process 1 has a mean defined as 1 and process 2 has a mean defined as 2....
-
A chemical reactor process whose production rate is a function of catalyst addition is shown in block diagram form in Figure P10.7 [10]. The time delay is T = 50 s, and the time constant T is...
-
Sports-Related Concussions in Kids Researchers examined all sports-related concussions reported to an emergency room for children ages 5 to 18 in the United States over the course of one year. Table...
-
If five people from the same organization calculated manufacturing cycle efficiency for one specific process, would each compute the same MCE? Why or why not?
-
Suppose that there are three firms in a region that are producing a common emission. The marginal abatement cost (MAC) for each firm is given by: MAC1 240-2E1 MAC2 192-1.6E2 MAC3 = 320 -2.67E3 The...
-
1. What are the inputs, process, output, and feedback/control for a grocery store such as Sobeys? 2. What are the operations decisions for running a grocery store such as So beys? Sobeys Inc. is the...
-
2. [13 points] On Feb 15, 2015, the yields to maturity in the table below were recorded on Treasury discount bonds. Maturity Date February 15, 2020 February 15, 2025 February 15, 2030 February 15,...
-
Jimmy and Elizabeth plan on getting married on the 15th of August. Elizabeth decides that she would prefer to have the reception in her backyard, so she rents an event tent from CELEBRATE Ltd, a firm...
-
Classify the singularities of this algebraic plane curve. y = x (x 1)(x 2) - Classify the singularities of this algebraic plane curve. - y = (x 2)(x 4)(x 6)
-
Find an algebraic expression equal to sec (sin (You may assume that < sin (5x 4) < ) Provide your answer below: sec(sin (5x = 4)) = (5x-4)).
-
Question 2 (20 points). The market supply and demand curves for a product are: Qs-0.5P (supply curve) QD-60-2P (demand curve) where Q is the quantity of the product and P is the market price. (1)....
-
1. This is information from multiple sources that is available to the general public A. OSINT B. bug bounty C. active reconnaissance D. warflying 2. _____ are the boundaries of a...
-
Question 1 You have recently set up your sole proprietorship business registered under the HDB Home Office Scheme . You are the owner of the HDB flat and the business does not pay a monthly rental...
-
From the choice of simple moving average, exponential smoothing, and linear regression analysis, which forecasting technique would you consider the most accurate? Why? please write it in word...
-
A large manufacturer of truck and car tires recently changed its cost-flow assumption method for inventories at the beginning of 2010. The manufacturer has been in operation for almost 40 years, and...
-
Exhibit 5.22 presents selected financial data for Tribune Company and Washington Post for fiscal 2006 and 2007. The Washington Post Company is an education and media company. It owns, among others,...
-
If a firms residual income for a particular year is positive, does that mean the firm was profitable? Explain. If a firms residual income for a particular year is negative, does that mean the firm...
-
Take the company you chose for question 2 (or choose another), and search for information about the company's social and environmental responsibility practices. Some companies publish annual...
-
As technology becomes more pervasive, new and complex ethical issues have arisen in the workplace, which have contributed to ethical and, at times, legal challenges for employers and employees....
-
Warren Buffett is a world-famous investor and CEO of conglomerate Berkshire Hathaway, which includes companies as diverse as Kraft Heinz, Geico Auto Insurance, and Benjamin Moore Paints. Buffett...
Study smarter with the SolutionInn App