on january 1, 2016 monic company decided to issue 5000 10-year bonds of 8% P1000 face value each with warrants to acquire share capital at P30 per share. the interest on the bonds is payable annually every december 31. each bond contains one warrant which can be used to acquire 4 shares of P25 par value share capital. it is reliably determined that without warrants, the bonds would sell at 114.7 with a 6% effective yield. the bond price with warrants is 120. all warrants are exercised on december 31 2016

required:

prepare journal entries for 2016 in connection with the bond issuance and the exercise of the warrants. use effective interest method of amortization