,000 gtoek purchase 1 , 2020, Grad Corporation issued $100,000 of 9% (cash payable each June 30 bonds payable (convertible and callable) at a 10% market rateofinterest. Each$100 bond e option of the holder, into Grand common stock (par $10) as follows: first five years- warrants On January ible, at th after the fifth year at 101. payable each June 30 and December 3) Problem 16-95 interest. Each $1,000 bond is convert Recording Entries 5 shares for Redemable Dett for Converible Debt five years-20 shares for each bond. The bonds can be called, at the option of On July 1, 2026, the market rate on comparable bonds is 8%, and the common stock is quoted on the man at $52 per share. ket Required a. Provide the entry to record issuance of bonds on January 1, 2020. Show computation b. Provide the entry to record payment of bond interest and of the bond issue price. the amortization of bond premium or discount on June 30, 2020. Use the effective interest method. Prepare the journal entries at July 1,2026, to record each of the followi line amortization). I. Assumption A: All of the bondholders converted their bonds to common stock. Use the book value c. ing separate assumptions (use straight method to record the conversion. Assumption B: Grand called all of the bonds at the stipulated call price. Assumption C: Grand refunded all of the outstanding 9% bonds by purchasing them in the open market at the current yield rate of interest. Cash for the refunding was obtained by issuing new 8% bonds (cash interest payable semiannually) at par, cash proceeds were $103,000 (face amount of bonds sold). 2. 3 which of the three alternative means of retiring the old 9% bonds is most likely to occur if each is available to investors? Why? d we0 0 two-year Problem 16-96 January 1, 2020, Grand Corporation issued $100,000 of 9% (cash payable each June 10-year bonds payable (convertible and callable) at a 10% market rate of interest. Each si purchase warrants the option of the holder, into Grand common stock (par $10) as follows: first five h option of C and December 31) P at the option o for Convertible De ible, S1,000 bond is convert- each bond tendered; second five years -20 shares for each bond. The bonds can be called. 5 sharerand years-25 shares for Redoemable Deb LO2, 4, 7, 8 after the fifth year at 101. On July 1 2026, the market rate on comparable bonds is 8%, and the common stock is q at $52 per share. quoted on the market Required a. Provide the entry to record issuance of bonds on January 1, 2020. Show computation of the b. Provide the entry to record payment of bond interest and the amortization of bond premium omputation of the bond issue price or discount on June 30, 2020. Use the effective interest method. Prepare the journal entries at July 1, 2026, to record each line amortization) . Assumption A: All of the bondholders converted their bonds to common stock. Use the book value c of the following separate assumptions (use straight- method to record the conversion. Assumption B: Grand called all of the bonds at the stipulated call price. Assumption C: Grand refunded all of the outstanding 9% bonds bypurchasing therm in the open market at the current yield rate of interest. Cash for the refunding was obtained by issuing new 8% bonds (cash interest payable semiannually) at par; cash proceeds were $103,000 (face amount of bonds sold). 2. 3. d. Wh ich of the three alternative means of retiring the old 9% bonds is most likely to occur if each is available to investors? Why