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What the value to be recorded for the conversion option is

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Problem 1: Jhansu Ltd. issued $ 4,000,000, 5-year, 8% convertible bonds at par. Bonds pay interest annually. Each $ 1,000 bond is convertible to 200 of Jhansu's no par value common shares, which are currently trading at $ 25 each. The current market rate for similar non-convertible bonds is 10%. Assuming Jhansu adheres to IFRS, the value to be recorded for the conversion option is:

Reference no: EM132786974

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