Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to US. GAAP to prepare consolidated financial statements. Ignore income taxes. Izmir A.S. issued convertible bonds at their face value of 109,000 lira on December 31, 2020. The bonds have a 10-year life with interest of 10 percent payable annually. At the date of issue, the prevailing interest rate for similar debt without a conversion option was 12 percent. Required: a. Prepare journal entries for this compound financial instrument for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, conversion worksheet to convert IFRS balances to U.S. GAAP. Complete this question by entering your answers in the tabs below. Required A Required B Prepare journal entries for this compound financial instrument for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round PV factor to 7 decimals. Round your intermediate and final answers to nearest whole dollar.)

Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to US. GAAP to prepare consolidated financial statements. Ignore income taxes. Izmir A.S. issued convertible bonds at their face value of 109,000 lira on December 31, 2020. The bonds have a 10-year life with interest of 10 percent payable annually. At the date of issue, the prevailing interest rate for similar debt without a conversion option was 12 percent. Required: a. Prepare journal entries for this compound financial instrument for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, conversion worksheet to convert IFRS balances to U.S. GAAP. Complete this question by entering your answers in the tabs below. Required A Required B Prepare journal entries for this compound financial instrument for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round PV factor to 7 decimals. Round your intermediate and final answers to nearest whole dollar.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 7MCQ

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