Edit View History Bookmarks Window Help 14 Pre-Built Problems Help On Janusry 1,

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Edit View History Bookmarks Window Help 14 Pre-Built Problems Help On Janusry 1, 2018, Gless Textiles issued $12.2 million of 11%, 10-year convertible bonds at 101. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 40 shares of Gless's no par common stock. Bonds that are similar in all respects, except that they are no convertible, currently are sell g at 99 hat is, 99% of Oce amount, Cert ry Services purchased t2% of the ssue as an investment Required: Assume Gless Textles prepares its financial statements according to International Financial Reporting Standards. Prepare the journal entry for the issuance of the bonds by Gless using the net method. of no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars Journal entry worksheet Record the entry for the issuance of bonds by Gless under IFRS using the net Enter debits before credts

Explanation / Answer

SOLUTION:

Debit Credit Cash 12,322,000 Convertible bonds payable 12,078,000 Equity—conversion option 244,000 Working: Cash (101% × $12.2 million) = 12,322,000 Convertible bonds payable (99% × $12.2 million) = 12,078,000

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