solved: The following are unrelated transactions 1 On

March 1 2014 Loma

solved: The following are unrelated transactions 1 On March 1 2014 Loma
The following are unrelated transactions.1. On March 1, 2014, Loma Corporation issued
$300,000 of 8% non-convertible bonds at 104, which are due on February 28, 2034. In addition,
each $1,000 bond was issued with 25 detach
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transactions-1-on-march-1-2014-loma
solved: The following are unrelated transactions 1 On March 1 2014 Loma
The following are unrelated transactions.1. On March 1, 2014, Loma Corporation issued
$300,000 of 8% non-convertible bonds at 104, which are due on February 28, 2034. In addition,
each $1,000 bond was issued with 25 detachable stock warrants, each of which entitled the
bondholder to purchase one of Loma's no par value common shares for $50. The bonds without
the warrants would normally sell at 95. On March 1, 2014, the fair value of Loma's common
shares was $40 per share and the fair value of each warrant was $2. Loma prepares its
financial statements in accordance with IFRS.2. Grand Corp. issued $10 million of par value,
9%, convertible bonds at 97. If the bonds had not been convertible, the company's investment
banker estimates they would have been sold at 93. Grand Corp. has adopted ASPE, and would
like to explore all options available to report the convertible bond.3. Hussein Limited issued $20
million of par value, 7% bonds at 98. One detachable stock purchase warrant was issued with
each $100 par value bond. At the time of issuance, the warrants were selling for $6. Hussein
Limited has adopted ASPE.4. On July 1, 2014, Tien Limited called its 9% convertible bonds for
conversion. The $10 million of par value bonds were converted into 1 million common shares.
On July 1, there was $75,000 of unamortized discount applicable to the bonds, and the
company paid an additional $65,000 to the bondholders to induce conversion of all the bonds.
At the time of conversion, the balance in the account Contributed Surplus-Conversion Rights
was $270,000, and the bond's fair value (ignoring the conversion feature) was $9,955,000. The
company records conversion using the book value method. The company prepares its financial
statements using IFRS.5. On December 1, 2014, Horton Company issued 500 of its $1,000, 9%
bonds at 103. Attached to each bond was one detachable stock warrant entitling the holder to
purchase 10 of Horton's common shares. On December 1, 2014, the fair value of the bonds,
without the stock warrants, was 95, and the fair value of each stock warrant was $50. Horton
Company prepares its financial statements in accordance with IFRS.InstructionsPresent the
required entry(ies) to record each of the above transactions.View Solution:
solved: The following are unrelated transactions 1 On March 1 2014 Loma
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transactions-1-on-march-1-2014-loma

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