Wang Inc. has $ 3,000,000 (par value), 8% convertible bonds outstanding. Each $ 1,000 bond is convertible into thirty no par value common shares. The bonds pay interest on January 31 and July 31. The bonds issued at 109 at the time the similar straight bonds were selling at 105. On July 31, 2020, the holders of $ 900,000 worth of bonds exercised the conversion privilege. On that date the market price of the bonds was 105, the market price of the common shares was $ 36, the carrying value of the common shares was $ 18 and the total unamortized bond premium at the date of conversion was $210,000. Instructions a) Assume Wang follows IFRS and decides to use the residual method and measures the debt first. Calculate the amount to be allocated to the bond and to the conversion rights. b) Prepare the journal entry at the date of issuance of the bonds under IFRS. c) Using the book value method, record the conversion on July 31, 2020

1. How many shares were issued at the conversion?
2. Assume now that Wang follows ASPE and has chosen as an accounting policy to value the equity component at zero. Prepare the journal entry at the date of issuance of the bonds.