申論題

三、On January 1, 2011, Burberry Company issued a convertible bond with a par value of $50,000 in the market for $60,000. The bonds are convertible into 6,000 ordinary shares of $1 per share par value. The bond has a 5-year life and has a stated rate of 10% payable annually. The market interest rate for a similar non-convertible bond is 8%. 

(b) Assume that the bonds were converted on December 31, 2013. Prepare the journal entry to record the conversion on December 31, 2013. Assume that the accrual of interest related to 2013 has been recorded. (5%)