On January 20X2, ABC Corporation Issued $1,000,000 Face Amount of 8

Essay

On January 20X2, ABC Corporation issued $1,000,000 face amount of 8%, five year, convertible debentures.Interest is payable semi-annually on 30 June and 31 December.The debentures are convertible at the holder's option at the rate of 20 common shares for each $1,000 bond.The market rate of interest for non-convertible bonds of similar risk and maturity is 6%.The net proceeds received by ABC Corporation amounted to $1,250,000.
Prepare a Journal entry to record the issuance of the bonds on 1 January 20X2.