Zola SA issued convertible bonds. At maturity, all the holders exercise their conversion right. At that date, the carrying amount of the liability component is 1,020,000; the original equity component is 135,000 (case data). Rule of the standard: on conversion, the carrying amount of the liability is reclassified to equity, with no gain or loss, and the original equity component remains in equity. Record the conversion entry.
- Carrying amount of the liability component at maturity
- 1,020,000
- Original equity component (stays in equity)
- 135,000