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Assume that a foreign company using IFRS is owned by a company using U.S. GAAP Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes. Izmir A. S. Issued convertible bonds at their face value of 138,000 lira on December 31, 2020. The bonds have a 10-year life with interest of 11 percent payable annually. At the date of issue, the prevailing interest rate for similar debt without a conversion option was 13 percent. Required: a. Prepare journal entries for this compound financial instrument for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S.parent would make on the December 31, 2020, conversion worksheet to convert IFRS balances to U.S. GAAP. Prepare journal entries for this compound financial instrument for the year ending December 31, 2020, under (1) IFRS and ( U.S. GAAP. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round PV factor to 7 decimals. Round your intermediate and final answers to nearest whole dollar.) No Date General Journal Debit Credit 1 12/31/2020 Cash 138,000 Bonds payable 123,025 X Additional paid-in capital - Convertible bonds 14,975 >> 2 12/31/2020 Cash Bonds payable 138,000 138.000 Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, conversion worksheet to convert IFRS balances to U.S. GAAP. (If no entry is required for a transaction/eveit, select "No journal entry required" in the first account field. Round PV factor to 7 decimals. Round your intermediate and final answers to nearest whole dollar.) Date General Journal Debit Credit 12/31/2020 Additional paid-in capital - Convertible bonds 14,975 Bonds payable 14,975 % No 1 2 12/31/2021 Additional paid-in capital - Convertible bonds Bonds payable 14.975 14.975

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