On January 1, 2019, Ziko Inc. issued convertible bonds. The information relating to the convertible bonds is as follows: Face value of bonds Contract rate Price of bonds (at issue) Bonds mature after 17,000,000 5.00% 1.02 7 years Assume interest paid annually on January 1 of each year Bonds issued on Bonds can be converted after Each $1000 of face value of bond can be converted into Each call option is worth 1-Jan-19 1-Jan-23 25 no par common stock $2.25 Assume Ziko reports in U.S. GAAP, and can amortize any premium/discount on a straightline basis, provide the journal entries to record the following: 1) Recod the bond issue on January 1, 2019 2) Record interest expense for 2019 3) If the bonds are converted into stock on January 1, 2023 4) Now, assume that Lee reports in IFRS, provide the journal entry to record the issuance of the bonds on January 1, 2018
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