AMC Limited Issued five-year, 5% bonds for their par value of $890,000 on 1 January 20X1. Interest is paid annually. The bonds are convertible to common shares at a rate of 50 common shares for every $1,000 bond. (PV of $1. PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Assume that the bonds were convertible at the Investor's option and that the conversion option was valued at $72,980. a. Provide the journal entry on Issuance. (If no entry is required for a transaction/event, select "No journal entry required" in the f account field.) Answer is complete and correct. No 1 Transaction 1 General Journal Debit Credit Cash Discount on bonds payable G 890,000 72,980 Bonds payable Contributed capital: common share conversion rights 890,000 72,980 b. Calculate Interest expense for each year of the bond's five-year life. Use an Interest rate of 7% for this requirement. (Round your Intermediate calculations and final answers to the nearest whole dollar.) Answer is complete but not entirely correct. Beginning Assignment balance Interest @7% Payment Ending Balance 1 S 817,020 S 57,191 S 44,500 $ 829,711 2 829,711 3 843,291 58,080 59,030 44,500 843,291 44,500 857,821 4 857,821 60,047 - 44,500 873,368 5 873,368 61,136 44,500 890,004 c. Provide the journal entry to record maturity of the bond assuming shareholders convert their bonds to common shares. Is required for a transaction/event, select "No Journal entry required" in the first account field.) Answer is complete and correct. General Journal Debit 890,000 Credit 72,980 No 1 Transaction 1 Bonds payable Contributed capital: common share conversion rights Common shares 962,980 d. Assume instead that the bonds were repaid for $933,500 after Interest was paid In Year 3. Provide the journal entry for retirement, assuming $69,680 of the payment related to the option and the rest related to the bond. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account field. Round your intermediate and final answers to the nearest whole dollar.) Answer is not complete. No Transaction General Journal Debit Credit 1 1 Contributed capital: retirement of conversion option Loss on bond retirement Contributed capital: common share conversion rights Cash 2. Assume that the bonds were mandatorily convertible at maturity. a. Calculate the portion of the original proceeds relating to Interest and the equity portion. Use a discount rate of 6%. answers to the nearest whole dollar. Round time value factor to 5 decimal places.) Answer is not complete. Assignment Interest portion Equity portion b. Provide the journal entry on Issuance. (If no entry is required for a transaction/event, sele account field. Round your final answers to the nearest whole dollar. Round time value fact No Transaction General Journal Debit Credit