# journal entry at issuance using the proportional method

Question:ABC sold \$350,000 of 5% (annual interest payments) convertible 5 year bonds
at par. The market interest rate on the sale date was 7%. Each \$1,000 bond was convertible into 20 shares of KER Ltd. no-par value common shares on any interest date after the end of the first year from the date of issuance.
Required:
Using IFRS, prepare the journal entry at issuance using the proportional method. Assume that the option pricing model placed a value of \$73,675 for the conversion feature.      Hint: pv,5,0.07 is .71299;  pva,5,0.07 is 4.10020

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