Nova Gold Miners (NGM) is a gold mining company. NGM currently has two mines operating in Northwestern Ontario, and many explorations claims throughout Ontario and Quebec. The company is publicly listed on the Toronto Venture Exchange. NGM is hoping to attract new capital in the coming months and would like to show strong financial performance for its most recent fiscal year end (December 31, 2020). Analysts are focusing on the current year's earnings per share (EPS) in assessing future growth prospects. The company's shares are currently trading at $30 per share.

You work in NGM's accounting department and have been assigned to help the CFO prepare preliminary estimates of EPS. You are given the following summarized financial information.

The company's summarized SFP for non-current liabilities and shareholders' equity follows:

Non-current liabilities
Bond payable, $150,000, 5%, 5-year, 6% market yield	$147,250
Convertible bond, $150,000, 5%, 5-year, 5% market yield, convertible into 2,000 common shares	145,990
Shareholders' equity
Class A preferred shares, 150,000 issued, $1 cumulative dividend per share	1,500,000
Class B preferred shares, 50,000 issued, $1 non-cumulative dividend per share, convertible on a 10:1 basis for common shares	1,000,000
Contributed surplus: 10,000 options issued with $20 exercise price, 2-year term	55,000
Contributed surplus: convertible bond option	6,319
Common shares, 1,000,000 issued	1,000,000

The company has the following summarized statement of operations:

Revenue	$1,250,000
Operating costs	589,150
Interest expense
Non-convertible bond	8,759
Convertible bond	8,688
Income before taxes	643,403
Income tax (25%)	160,851
Net income	$482,552

The company has the following summarized statement of changes in equity:

	Preferred Shares	Convertible Preferred Shares	Contributed Surplus Options	Contributed Surplus Convertible Bond	Common Shares	Retained Earnings
Beginning value	$1,500,000	0	$55,000	$6,319	$750,000	$750,000
Shares issued	0	$1,000,000	0	0	350,000	0
Shares reacquired	0	0	0	0	(100,000)	0
Net income	0	0	0	0	0	482,552
Dividends	0	0	0	0	0	(150,000)
Ending value	$1,500,000	$1,000,000	$55,000	$6,319	$1,000,000	$1,082,552

Notes:

1. Convertible preferred shares were issued on January 1.
2. Additional common shares were issued on September 1.
3. Common shares were reacquired on April 1.
4. Dividends were paid to cumulative preferred shareholders.
5. Average price of the common shares was $30 per share.

1. Management is contemplating retiring the convertible bond for $161,000, which represents the current fair value of the bond ($152,500 for the fair value of the bond and $8,500 for the fair value of the conversion feature).
   1. Prepare the journal entry to retire the bond. (Assume the retirement is at the year end.)
   2. Assess the impact of management retiring the bond at December 31 on the future EPS calculations by completing the following table.

	Increase	Decrease	No Impact	Not Determinable
Basic EPS Net income available to common shareholders
Weighted average shares outstanding
Diluted EPS Net income available to common shareholders
Weighted average shares outstanding