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On January 1, 2020, Grand Corporation issued $100,000 of 9% (cash payable each June 30 and December 31) Problem 16-95 10-year bonds payable (convertible and

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On January 1, 2020, Grand Corporation issued $100,000 of 9% (cash payable each June 30 and December 31) Problem 16-95 10-year bonds payable (convertible and callable) at a 10% market rate of interest. Each $1,000 ible, at the option of the holder, into Grand common stock (par $10) as follows: first five years-25 shares for Redeemable Deb each bond tendered, second five years--20 shares for each bond. The bonds can be called, at the option of Grand, LO2, 4, 7, 8 after the fifth year at 101. bond is convert- Recording Entries for Convertible Debt, On July 1, 2026, the mark et rate on comparable bond s is 8%, and the common stock is quoted on the market at $52 per share. Required a. Provide the entry to record issuance of bonds on January 1,2020. Show computation of the bond issue price b. Provide the entry to record payment of bond interest and the amortization of bond premium or discount on June 30, 2020. Use the effective interest method. line amortization). 1. Assumption A: All of the bondholders converted their bonds to common stock. Use the book value . Prepare the journal entries at July 1,2026, to record each of the following separate assumptions (use straight- method to record the conversion. Assumption B: Grand called all of the bonds at the stipulated call price Assumption C: Grand refunded all of the outstanding 9% bonds by purchasing them al in the open market e current yield rte of interest. Cash for the refunding was obtained by issuing new 8% interest payable semiannually) at par; cash proceeds were $103,000 (face amount of bonds soldi bonds (cash hich of the three alternative means of retiring the old 9% bonds is most likely to cccur if to investors? Why? his le Problom Recording and 16-96 hndise for resale on January 1, 2020, for $5,000 cash plus a $20,000, (wo- l the note specified 8% interest payable each December 31 LO6

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