Note: $-$ SHOW ALL CALCULATIONS AND CALCULATOR KEYSTROKES.

Shields Corporation sells $$5,000,000$ of $8\%$ convertible bonds on July $1,2014$ for $$5,350,000.$ The bonds

mature on July $1,2029$ and pay interest semi$-$annually on July $1$ and December $31.$ Each $$1,000$ bond is

convertible into $50$ common shares at the investor's option at maturity. The market $($yield$)$ rate is $9\%.$

a$)$ Calculate the stated conversion price? $(2$ marks$)$

b$)$ Prepare the journal entry at issuance using the incremental method. $(4$ marks$)$

c$)$ Investor's decided to convert all of their bonds at maturity on July $1,2029$ after interest is paid.

Record the conversion. $(2$ marks$)$

d$)$ Assume that instead of part $($c$)$ the investors decided not to exercise their conversion rights at

maturity, July $1,2029,$ after interest is paid. Make the entry on Shield Corporation's books. $(2$

marks$)$