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Record the issuance of the bonds and warrants

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Question - Carla Vista Capital Ltd. issued 530 $1,000 bonds at 101. Each bond was issued with 10 detachable stock warrants. After issuance, similar bonds were sold at 95, and the warrants had a fair value of $2.70.

Record the issuance of the bonds and warrants assuming that Carla Vista Capital follows IFRS

i) Assuming that Carla Vista Capital follows ASPE (residual value method), record the issuance of the bonds and warrants assuming that the debt is the more easily measurable component.

ii) Assuming that Carla Vista Capital follows ASPE (residual value method), record the issuance of the bonds and warrants assuming that the equity is the more easily measurable component.

iii) Assuming that Carla Vista Capital follows ASPE and values the equity component at zero.

Reference no: EM133000741

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