On January I, 2021, ABL Company issued ten convertible bonds with a par value of $ 12,000 per bond in the market for $123,009 in total. Each bond is convertible into 1,200 ordinary shares of $5 per ordinary share par value. The bonds have a five-year life and a stated interest rate of 7% payable annually. The market interest rate for similar non-convertible bonds on January 1, 2021, is 8%.

Required

a. Compute the fair value of liability component and fair value of equity component, rounded to the nearest dollar, and prepare the journal entry. In the computations, show the figures of present value factors and round to the fifth decimal point.

b. Prepare the amortization schedule for the bonds, including the cash interest, interest expense, amortized amount, and carrying amount of the bonds, all rounded to an integer. 

c. Assume that the bonds were repurchased on December 31, 2021, for $128,500. The fair value of the liability component is determined to be $121,500 on December 31, 2021. Compute any gain or loss on the repurchase, and prepare the journal entry to record the repurchase, assuming that the accrual of interest related to 202 1 has been recorded. 

d. independent of the above requirement 

c. Assume that the bond matured on December 31, 2025 and ABL repurchased the bond. Prepare the journal entry to record the transaction.