On July 1, 2018, May Company issued $ 5,000,000 of its 10%, 7- year bonds with detachable share warrants at 108. Each $ 1,000 bond carried a detachable share warrant for the purchase of 2 shares of $ 100 par value ordinary shares at $ 140 per share. The market value of the bonds ex-warrants is 102. 

REQUIRED: 

(a)Prepare journal entry to record the issuance of the bonds with detachable warrants.

(b)Prepare journal entry to record the exercise of warrants, assuming that all of the warrants were subsequently exercised.