A Company Issues Convertible Bonds with Face Value of $7,000,000

Essay

A company issues convertible bonds with face value of $7,000,000 and receives proceeds of $8,500,000. Each $1,000 bond can be converted, at the option of the holder, into 100 common shares. The underwriter estimated the market value of the bonds alone, excluding the conversion rights, to be approximately $7,300,000.
Required:
Record the journal entry for the issuance of these bonds based on IFRS.