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Bradley - Link's December 3 1 , 2 0 2 1 , balance sheet included the following items: Long - Term Llabilities 9 . 6
BradleyLink's December balance sheet included the following items:
LongTerm Llabilities
convertible bonds, callable at beginning in due net
of unamortized discount of $note
registered bonds callable at beginning in due net
of unamortized discount of $note
Shareholders' Equity
Equitystock warrants
$ in millions
$
Note : Bonds In part
The bonds were issued in at to yleld Interest is pald semlannually on June
and December Each $ bond is convertible Into shares of the Company's no par
common stock.
The bonds were issued in at to yleld Interest is pald semlannually on
June and December Each $ bond was issued with detachable stock warrants,
each of which entitles the holder to purchase one share of the Company's no par common stock
for $ beginning On January when BradleyLink's common stock had a market price of $ per share, BradleyLink
called the convertible bonds to force conversion. were converted; the remainder were acquired at the call
price. When the common stock price reached an alltime high of $ in December of of the warrants
were exercised.
Required:
Prepare the journal entries that were recorded when each of the two bond issues was originally sold in
and
Prepare the journal entry to record book value method the conversion of of the convertible bonds in
January and the retirement of the remainder.
Assume BradleyLink induced conversion by offering $ cash for each bond converted. Prepare the journal
entry to record book value method the conversion of of the convertible bonds in January
Assume BradleyLink induced conversion by modifying the conversion ratio to exchange shares for each
bond rather than the shares provided in the contract. Prepare the journal entry to record book value
method the conversion of of the convertible bonds in January Prepare the journal entry to record the exercise of the warrants in December
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