3 Skim through chapter 16 and find answers for Q3 and Q4 21 Is there a clear-cut difference between debt and equity? Give an example to support your argument. 3 42. What are convertible bonds? What are the reasons for issuing convertible bonds? 5 6 3. What is the method for recording convertible bonds at the date of issuance? What is the method used to record the conversion of convertible bonds? What is the method for recording the 7 retirement of convertible bonds? 94 10 11 What is the difference between convertible preferred stocks and convertible preferred bonds? 12 5 What method does a company use in accounting for the exercise of convertible preferred stock? 13 14 15 16 6. What are stock warrants? 17 7. When stock warrants are issued together with other securities, two methods can be used to allocate the proceeds between the stock warrants and the other securities: the proportional method 18 and the incremental method. Briefly describe them. 19 20