BRIEF EXERCISES BE16-1 (L01) Archer Inc. issued $4,000,000 par value, 7% convertible bonds at 99 for cash. If the bonds had not included conversion feature, they would have sold for 95. Prepare the journal entry to record the issuance of the bonds. BE16-2 (L01) Petrenko Corporation has outstanding 2,000 $1,000 bonds, each convertible into 50 shares of $10 par value com- mon stock. The bonds are converted on December 31, 2017, when the unamortized discount is $30,000 and the market price of the stock is $21 per share. Record the conversion using the book value approach. BE16-3 (L01) Pechstein Corporation issued 2,000 shares of $10 par value common stock upon conversion of 1,000 shares of $50 par value preferred stock. The preferred stock was originally issued at $60 per share. The common stock is trading at $26 per share at the time of conversion. Record the conversion of the preferred stock. BE16-4 (L02) Eisler Corporation issued 2,000 $1,000 bonds at 101. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling in the market at 98, and the warrants had a market price of $40. Use the proportional method to record the issuance of the bonds and warrants. BE16-5 (L02) McIntyre Corporation issued 2,000 $1,000 bonds at 101. Each bond was issued with one detachable stock war- rant. After issuance, the bonds were selling separately at 98. The market price of the warrants without the bonds cannot be determined. Use the incremental method to record the issuance of the bonds and warrants. BE16-6 (L03) On January 1, 2017, Barwood Corporation granted 5,000 options to executives. Each option entitles the holder to purchase one share of Barwood's $5 par value common stock at $50 per share at any time during the next 5 years. The market price of the stock is $65 per share on the date of grant. The fair value of the options at the grant date is $150,000. The period of benefit is 2 years. Prepare Barwood's journal entries for January 1, 2017, and December 31, 2017 and 2018. BE16-7 (L03) Refer to the data for Barwood Corporation in BE16-6. Repeat the requirements assuming that instead of options. Barwood granted 2,000 shares of restricted stock