Patrick Roch International issued 5% bonds convertible into shares of the company's common stock. Roch applies International Financial Reporting Standards (IFRS). Upon issuance, Patrick Roch International should record:

Question

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Under IFRS, convertible bonds are accounted for as part debt and part equity. This is because the company is raising funds through the issuance of debt, but also providing an option for bondholders to convert their bonds into equity shares in the future. The amount of debt and equity components is determined by the fair value of each component at the time of issuance.

Patrick Roch International Issued 5% Bonds Convertible into Shares of the Company's