On January 1, 2017, King Co issued a $8 million, 8%, 10-year convertible bond with annual...

On January 1, 2017, King Co issued a $8 million, 8%, 10-year convertible bond with annual coupon payments. Each $1,000 bond was convertible into 25 shares of King’s common shares. Prince Investments purchased the entire bond issue for $8,250,000 million on January 1, 2017. King estimated that without the conversion feature, the bonds would have sold for $7,508,435 (to yield 10%).

On January 1, 2019, Prince converted bonds with a par value of $4 million. At the time of conversion, the shares were selling at $45 each.

Required:

Prepare the journal entry to record the issuance of the convertible bonds. Assuming both companies use IFRS.

Expert Solution

ekkarill92 answered 2 years ago

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