31. Pelton, Inc. issued 2,000,000 par value, 7% convertible bonds at 99 for cash. The net present value of the debt without the conversion feature is 1,9000,000. What amount will Peloton assign to the equity feature of these bonds?

a. 100,000

b. - 0 -

c. 99,000

d. 80,000

32. Mae Jong Corp. issued 1,000 convertible bonds at the beginning of 2021. The bonds have a four-year term with a stated rate of interest of 6 percent, and are issued at par with a face value of 1,000 per bond (the total proceeds received from issuance of the bonds are 1,000,000). Interest is payable annually at December 31. Each bond is convertible into 250 ordinary shares with a par value of 1. The market rate of interest on similar non-convertible debt is 9 percent. Assume that at the issuance date, 97,187 was credited to Share PremiumConversion Equity. The bonds were not converted at maturity and Mae Jong pays off the convertible debt holders. What amount will Mae Jong record as a gain or a loss on this transaction?

a. -0-

b. 97,187

c. 24,297

d. 250,000

33. On January 2, 2022, LexxMark Co. issues 2,000 convertible preference shares that have a par value of 20 per share. The shares were issued at a price of 400 per share. On December 31, 2024, LexxMark Co. repurchases the convertible preference shares for 820,000. On this date, LexxMark will record

a. A loss of 20,000.

b. A credit to Share PremiumConversion Equity 40,000.

c. A debit to Retained Earnings 20,000.

d. A credit to Share CapitalPreference 40,000.

34. Five years ago, Dunn Trading Co. issued 2,500 ordinary shares. The shares have a 2 par value and sold at that time for 12 per share. On January 1, 2022, Dunn Trading Co. Purchased 1,000 of these shares for 24 per share. On September 30, 2022, Dunn reissued 500 of the shares for 28 per share. The journal entry to record the reissuance will include

a. A debit to Treasury Shares 12,000.

b. A credit to Share PremiumTreasury 2,000.

c. A credit to Treasury Shares 14,000.

d. A credit to cash 14,000.