Grand Corp. issued $20,302,000 par value 12% convertible bonds at 96. If the bonds had not been convertible, the companys investment banker estimates they would have been sold at 95. Expenses of issuing the bonds were $78,600.
2.		Hoosier Company issued $20,302,000 par value 12% bonds at 95. One detachable stock warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $5.
3.		Suppose Sepracor, Inc. called its convertible debt in 2014. Assume the following related to the transaction: The 13%, $10,398,000 par value bonds were converted into 1,039,800 shares of $1 par value common stock on July 1, 2014. On July 1, there was $60,900 of unamortized discount applicable to the bonds, and the company paid an additional $79,900 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method.