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Cullumber Inc. issued $6 million of 10-year, 9% convertible bonds on June 1, 2020, at...

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Accounting

Cullumber Inc. issued $6 million of 10-year, 9% convertible bonds on June 1, 2020, at 95 plus accrued interest. The bonds were dated April 1, 2020, with interest payable April 1 and October 1. Bond discount is amortized semi-annually. Bonds without conversion privileges would have sold at 94 plus accrued interest.

On April 1, 2021, $1.50 million of these bonds were converted into 30,000 common shares. Accrued interest was paid in cash at the time of conversion. Assume that the company follows IFRS.

(a)

Prepare the entry to record the issuance of the convertible bonds on June 1, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.)

Date

Account Titles and Explanation

Debit

Credit

June 1, 2020

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enter a debit amount

enter a credit amount

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enter a debit amount

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enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

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