1. Effect of Financing on Earnings per Share

Domanico Co., which produces and sells biking equipment, is financed as follows:

Bonds payable, 10% (issued at face amount)	$350,000
Preferred $2 stock, $20 par	350,000
Common stock, $25 par	350,000

Income tax is estimated at 40% of income.

Determine the earnings per share on common stock, assuming that the income before bond interest and income tax is (a) $126,000, (b) $161,000, and (c) $196,000.

Enter answers in dollars and cents, rounding to two decimal places.

a. Earnings per share on common stock $

b. Earnings per share on common stock $

c. Earnings per share on common stock $

2. Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method

On the first day of its fiscal year, Chin Company issued $15,800,000 of five-year, 10% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Chin Company receiving cash of $15,204,522.

a. Journalize the entries to record the following:

1. Issuance of the bonds.
2. First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)
3. Second semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)

For a compound transaction, if an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar.

b. Determine the amount of the bond interest expense for the first year. $

c. Why was the company able to issue the bonds for only $15,204,522 rather than for the face amount of $15,800,000?b. Determine the amount of the bond interest expense for the first year. $

The market rate of interest is the contract rate of interest.

*please answer both- if you can't just the first one, thank you*