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I need help with three questions please see attached file for directions Problem 1Stock Options Prepare the necessary entries from 1/1/12-2/1/14 for the following events

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I need help with three questions please see attached file for directions

image text in transcribed Problem 1Stock Options Prepare the necessary entries from 1/1/12-2/1/14 for the following events using the fair value method. If no entry is needed, write "No Entry Necessary." 1. On 1/1/12, the stockholders adopted a stock option plan for top executives whereby each might receive rights to purchase up to 15,000 shares of common stock at $40 per share. The par value is $10 per share. 2. On 2/1/12, options were granted to each of five executives to purchase 15,000 shares. The options were non-transferable and the executive had to remain an employee of the company to exercise the option. The options expire on 2/1/14. It is assumed that the options were for services performed equally in 2012 and 2013. The Black-Scholes option pricing model determines total compensation expense to be $1,600,000. 3. At 2/1/14, four executives exercised their options. The fifth executive chose not to exercise his options, which therefore were forfeited. Problem 2Earnings Per Share Computations Cabana Corporation has 400,000 shares of common stock outstanding throughout 2013. In addition, the corporation has 5,000, 20-year, 9% bonds issued at par in 2011. Each $1,000 bond is convertible into 20 shares of common stock after 9/23/14. During the year 2013, the corporation earned $900,000 after deducting all expenses. The tax rate was 30%. Required: Compute the proper earnings per share for 2010. Show your results with two decimal places Problem 3Convertible Bonds and Stock Warrants For each of the unrelated transactions described below, present the entry (ies) required to record the bond transactions. 1. On August 1, 2013, Lane Corporation called its 10% convertible bonds for conversion. The $6,000,000 par bonds were converted into 240,000 shares of $20 par common stock. On August 1, there was $700,000 of unamortized premium applicable to the bonds. The fair value of the common stock was $20 per share. Ignore all interest payments. 2. Packard, Inc. decides to issue convertible bonds instead of common stock. The company issues 10% convertible bonds, par $3,000,000, at 97. The investment banker indicates that if the bonds had not been convertible they would have sold at 94. 3. Gomez Company issues $10,000,000 of bonds with a coupon rate of 8%. 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 $9,870,000 and the value of the warrants is $630,000. The bonds with the warrants sold at 101. Support your responses with examples

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