On January 1, 2021, Hudson, a publicly accountable entity, granted 25,000 stock options (valued at

$550,000, in total) to its executives. The options have a two-year vesting period and expire on January 1,

2024. The strike price for the options is $25 while the market price at the grant date was $35.

On December 31, 2021, Hudson issued a $2,000,000, 7% bond with detachable warrants at par. Each

$1,000 bond comes with a warrant valued at $80. Without the warrants, a similar bond would have been

issued at 98 on the market.

Required:

a. Provide the journal entry(ies) associated with the stock options for fiscal 2021.

b. Provide the journal entry associated with the issuance of the convertible bond.

C. If Hudson reported under ASPE, what alternative measurement approach(es) could be used to

recognize the convertible bond?