Question: On January 2, 2013, McGregor Co. issued at par $45,000 of 9% bonds convertible in total into 4,000 shares of McGregor's common stock. No bonds

On January 2, 2013, McGregor Co. issued at par $45,000 of 9% bonds convertible in total into 4,000 shares of McGregor's common stock. No bonds were converted during 2013. Throughout 2013, McGregor had 10,000 shares of common stock outstanding. McGregor's 2013 net income was $75,000. McGregor's tax rate is 30%.
No other potentially dilutive securities other than the convertible bonds were outstanding during 2013. For 2013, compute McGregor's basic and diluted EPS.

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