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All answers are in millions. ie. 10,400,000 = 10.4 thanks! Bradley-Link's December 31, 2018, balance sheet included the following items: ($ in millions) $198 Long-Term
All answers are in millions. ie. 10,400,000 = 10.4 thanks!
Bradley-Link's December 31, 2018, balance sheet included the following items: ($ in millions) $198 Long-Term Liabilities 8.08 convertible bonds, callable at 102 beginning in 2019, due 2022 (net of unamortized discount of $2) [note 8] 11.08 registered bonds callable at 105 beginning in 2028, due 2032 (net of unamortized discount of $1) (note 8] Shareholders' Equity Equity-stock warrants 61 7 Note 8: Bonds (in part) The 8.0% bonds were issued in 2005 at 98.0 to yield 10%. Interest is paid semiannually on June 30 and December 31. Each $1,000 bond is convertible into 50 shares of the Company's no par common stock. The 11.0% bonds were issued in 2009 at 103 to yield 10%. Interest is paid semiannually on June 30 and December 31. Each $1,000 bond was issued with 50 detachable stock warrants, each of which entitles the holder to purchase one share of the Company's no par common stock for $30, beginning 2019. On January 3, 2019, when Bradley-Link's common stock had a market price of $37 per share, Bradley-Link called the convertible bonds to force conversion. 90% were converted; the remainder were acquired at the call price. When the common stock price reached an all-time high of $42 in December of 2019, 40% of the warrants were exercised. Required: 1. Prepare the journal entries that were recorded when each of the two bond issues was originally sold in 2005 and 2009. 2. Prepare the journal entry to record (book value method) the conversion of 90% of the convertible bonds in January 2019 and the retirement of the remainder. 3. Assume Bradley-Link induced conversion by offering $170 cash for each bond converted. Prepare the journal entry to record (book value method) the conversion of 90% of the convertible bonds in January 2019. 4. Assume Bradley-Link induced conversion by modifying the conversion ratio to exchange 55 shares for each bond rather than the 50 shares provided in the contract. Prepare the journal entry to record (book value method) the conversion of 90% of the convertible bonds in January 2019. 5. Prepare the journal entry to record the exercise of the warrants in December 2019Step by Step Solution
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