Present all the necessary journal entries on the books

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Reference no: EM132821126

Question - Sunland Inc. issued a debenture bond to Karamoutz Bank to finance new technology it developed. The debenture was for $470,000, issued at face value, with a 10-year term and interest payable at 10%. Sunland Inc.'s new technology proved not to be technically feasible and caused it to go into financial distress. The debenture is due today, December 31, 2020, and Sunland does not have the funds to repay the debenture or the interest. As a result, Karamoutz agreed to extend the debenture due date for five more years and reduce the principal amount to $282,000 in exchange for receiving 18,800 common shares of Sunland, currently trading at $5per share. Interest will still be payable at 10% and will continue to be due annually on December 31 of each year. The current market rate is 12%. Sunland prepares financial statements in accordance with IFRS. Present all the necessary journal entries on the books of Sunland Inc. from the time of restructuring the debenture through maturity.

Reference no: EM132821126

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