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Record the journal entry for the issuance of the shares

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Reference no: EM132811909

A company issued 95,000 preferred shares and received proceeds of $6,000,000. These shares have a benchmark value of $48 per share and pay cumulative dividends of 6%. Buyers of the preferred shares also received a detachable warrant with each share purchased. Each warrant gives the holder the right to buy one common share at $35 per share within 10 years.

  • The underwriter estimated that the market value of the preferred shares alone, excluding the conversion rights, is approximately $57 per share. Shortly after the issuance of the preferred shares, the detachable warrants traded at $8 each. (3 marks)

Required:

Problem 1: Record the journal entry for the issuance of these shares and warrants under IFRS.

Reference no: EM132811909

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