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Question · Splitting a compound instrument at inception

Cyan SA issues bonds convertible into a fixed number of shares for total proceeds of 500,000, received on the issue date. Case data: the fair value of a similar liability without a conversion option, which measures the liability component, is 431,000. Record the issue entry for the convertible bonds.

Issue proceeds
500,000
Fair value of the liability component (case data)
431,000
Your answer
  1. Line 1

    Account Cash received

  2. Line 2

    Account Liability component

  3. Line 3

    Account Equity component

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