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Mama Entity issues 100 shares of $1,000 convertible bonds on January 1, 20x1. The bonds have a five-year life, and a 5% annual interest pay

Mama Entity issues 100 shares of $1,000 convertible bonds on January 1, 20x1. The bonds have a five-year life, and a 5% annual interest pay in arrears. Similar bonds without the conversion feature have a 10% interest rate. What is the liability and equity component of the convertible bonds?

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