Nero Solutions Co. issued an $950,000,5%, three-year bond for $956,000. The bond pays Interest annuelly, at each year-end. At maturity, the bond can be repaid in cash or converted to 75,000 common shares at the investor's option. The market interest rate for bonds of similar term and risk, but that are not convertible, is in the range of 6% PV of S1, PVA of S1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Calculate the portion of the bond to be recorded as a liability (Round time value factor to 5 decimal places. Round down the bond liability to nearest tenth dollar) 2. Provide the entry to record issuance of the bond (if no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round time value factor to 5 decimal places. Round your intermediate calculations to nearest whole dollar. Round down the bond liability to nearest tenth dollar) View transaction is Journal entry worksheet 3. Provide the entries to record interest expense and the annual cash payment each year over the bond's three-year life. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round time value factor to 5 decimal places. Round your intermediate calculations and final answers to the nearest whole dollar. Round down the bond liability to nearest tenth dollar) View transaction is 1 Record the entry for interest expense and annual cash payment 2 Record the entry for interest expense and annual cash payment 3 Record the entry for interest expense and annual cash payment Credit 4. Provide the entry to record the maturity of the bond, assuming that shares were issued. (If no entry is required for a transaction/event, select "No Journal entry required in the first account field. Round time value factor to 5 decimal places. Round your intermediate calculations to nearest whole dollar. Round down the bond liability to nearest tenth dollar) View transaction list Journal entry worksheet Record the entry for issue of shares towards maturity of bonds. Note: Enter debits before credits Transaction General Journal Debit Credit 5. Provide the entry to record the maturity of the bond, assuming that cash is paid. (If no entry is required for a transaction/event. select "No journal entry required in the first account field. Round time value factor to 5 decimal places. Round your intermediate calculations to nearest whole dollar. Round down the bond liability to nearest tenth dollar) View transaction list Journal entry worksheet
