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Prepare journal entry to record the initial issuance of bond

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Question: Landos Limited issued convertible bonds on February 1 2020. The 5 year $8,000,000 bonds pay interest semi-annually each January 31 and July 31. At the investor's option, each $1,000 bond is convertible into 50 common shares on the bonds maturity date. The company has a January 31 year end.

Bond market analysts indicated that if the bonds had not been convertible, they would have sold to yield 6%. They were, in fact, issued for $8,750,000. The company follows IFRS.

Required: a. Provide the journal entry to record the initial issuance of the bond.

Reference no: EM132767494

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