Sunland Inc. issued $3 million of 10-year, 9% convertible bonds on June 1, 2023, at 98 plus accrued interest. The bonds were dated April 1, 2023, with interest payable April 1 and October 1. Bond discount is amortized semi-annually. Bonds without conversion privileges would have sold at 97 plus accrued interest. On April 1, 2024, $0.75 million of these bonds were converted into 15,000 common shares. Accrued interest was paid in cash at the time of conversion. Assume that the company follows IFRS. (a) Your answer is partially correct. Prepare the entry to record the issuance of the convertible bonds on June 1, 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,275. List all debit entries before credit entries.)
Sunland Inc. issued $3 million of 10-year, 9% convertible bonds on June 1, 2023, at 98 plus accrued interest. The bonds were dated April 1, 2023, with interest payable April 1 and October 1. Bond discount is amortized semi-annually. Bonds without conversion privileges would have sold at 97 plus accrued interest. On April 1, 2024, $0.75 million of these bonds were converted into 15,000 common shares. Accrued interest was paid in cash at the time of conversion. Assume that the company follows IFRS. (a) Your answer is partially correct. Prepare the entry to record the issuance of the convertible bonds on June 1, 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,275. List all debit entries before credit entries.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sunland Inc. issued $3 million of 10-year, 9% convertible bonds on June 1, 2023, at 98 plus accrued interest. The bonds were dated
April 1, 2023, with interest payable April 1 and October 1. Bond discount is amortized semi-annually. Bonds without conversion
privileges would have sold at 97 plus accrued interest.
On April 1, 2024, $0.75 million of these bonds were converted into 15,000 common shares. Accrued interest was paid in cash at the
time of conversion. Assume that the company follows IFRS.
(a)
Your answer is partially correct.
Prepare the entry to record the issuance of the convertible bonds on June 1, 2023. (Credit account titles are automatically indented
when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the
amounts. Round answers to O decimal places, e.g. 5,275. List all debit entries before credit entries.)
Date Account Titles and Explanation
June 1,
Cash
2023
Bonds Payable
Interest Payable
Bonds Payable
Debit
2,985,000
60,000
Credit
45,000
3,000,000
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