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For each of the unrelated situations described below, prepare the entries required to record the transactions. 1.On August 1, 2020, Lions Corporation called its 10%

For each of the unrelated situations described below, prepare the entries required to record the transactions.

1.On August 1, 2020, Lions Corporation called its 10% convertible bonds for conversion. The $ 4,000,000

par value bonds were converted into 160,000 no par common shares. On August 1, there was $ 350,000 of unamortized premium applicable to the bonds. At the time of issuance, Contributed Surplus - Conversion Rights was credited for $ 150,000, which represented the equity portion of the convertible bonds, and the market value of the common shares was $ 20 per share. The company records the conversion using the book value method. Ignore all interest payments.

2. Bears Inc. issues 10% convertible bonds, par $ 1,000,000, at 97. The investment banker indicates that if the bonds had not been convertible, they would have sold at 94. Use the residual method.

3. Jets Ltd. issues $ 2,000,000 par value, 8% bonds. To help the sale, detachable stock warrants are issued at the rate of ten warrants for each $ 1,000 bond sold. It is estimated that the value of the bonds without the warrants is $ 1,974,000 and the market value of the warrants is $ 126,000. The bonds with the warrants sold at 101. Use the residual method.

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