1. Ayayai Inc. issued $3,950,000 of 10%, 10-year convertible bonds on June 1, 2020, at 99 plus accrued interest. The bonds were dated April 1, 2020, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2021, $1,481,250 of these bonds were converted into 25,000 shares of $20 par value common stock. Accrued interest was paid in cash at the time of conversion.

(a)		Prepare the entry to record the interest expense at October 1, 2020. Assume that accrued interest payable was credited when the bonds were issued.
(b)		Prepare the entry to record the conversion on April 1, 2021. (Book value method is used.) Assume that the entry to record amortization of the bond discount and interest payment has been made.

(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,125.)

No.	Account Titles and Explanation	Debit	Credit
(a)	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
(b)	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

2. Cheyenne Corporation earned net income of $417,650 in 2020 and had 107,000 shares of common stock outstanding throughout the year. Also outstanding all year was $850,000 of 5% bonds, which are convertible into 17,000 shares of common. Cheyennes tax rate is 30 percent. Compute Cheyennes 2020 diluted earnings per share. (Round answer to 2 decimal places, e.g. 3.55.)

Diluted earnings per share

$enter diluted earnings per share in dollars rounded to 2 decimal places

3. The Swifty Corporation issued 10-year, $5,390,000 par, 7% callable convertible subordinated debentures on January 2, 2020. The bonds have a par value of $1,000, with interest payable annually. The current conversion ratio is 13:1, and in 2 years it will increase to 16:1. At the date of issue, the bonds were sold at 97. Bond discount is amortized on a straight-line basis. Swiftys effective tax was 20%. Net income in 2020 was $10,350,000, and the company had 2,170,000 shares outstanding during the entire year. Compute both basic and diluted earnings per share. (Round answers to 2 decimal places, e.g. $2.55.)

Basic earnings per share		$
Diluted earnings per share		$