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How should carla vista record the issuance if follows ifrs

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On January 1, 2020, Carla Vista Ltd. issued 810 5-year, 10% convertible bonds at par of $1,000, with interest payable each December 31. Each bond is convertible into 100 common shares, and the current fair value of each common share is $7. Similar straight bonds carry an interest rate of 12%.

Problem (a) Calculate the PV of the debt component by itself. Calculate using any of the following methods: (1) factor tables, (2) a financial calculator, or (3) Excel function PV.

Problem (b) How should Carla Vista record the issuance if it follows IFRS? Use the amount you arrived at in part (a) using a financial calculator or Excel.

Problem (c) How should Carla Vista record the issuance if it follows ASPE?

Reference no: EM132699788

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