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On October 1, 2010, Peter Co. sold 3 sets of bonds, each with $5,000,000 par value, 12% coupon and 5 years to maturity and a

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On October 1, 2010, Peter Co. sold 3 sets of bonds, each with $5,000,000 par value, 12% coupon and 5 years to maturity and a provision that they were callable by the company at 104.0 after 12 months. Interest was payable April 1 and October 1. The 15t set, Series 13 Basic bonds, were sold for $5 150 032 to yield 11.20%. The 2ilri set, Series C Convertible bonds, were sold for $5 200 032. Each $1,000 bond was convertible into 20 company common shares. The company's shares were selling this day on a stock exchange at $44.00. The 3\"1 set Series W bonds, were sold for $5 250 000. Each of these $1,000 bonds included detachable warrants entitling the holder to buy 10 common shares of the company at 5% discount to the market price. The company's scal year end is December 31. The company uses the effective interest method to amortize any bond preminrnfdisconnt. Required: (Round enh'y amounts to dollars, for interest rates use 3 decimals in calculations] a) Fill in the amortization table below for the W for the issue date and rst 2 payment dates. Show issuefpayrnerrt date, amount paid, amount expense-d, difference, ending carry value. 3 b) Provide required journal entries relating to these securities on the following dates 1. October 1, 2010 5 2. December 31, 2010 (year end accrual] 21 c) On April 2, 2011, part of the Series E Basic bond issue was redeemed early. Provide the journal why for redemption of $2,000,000 face value of these bonds at the call price of 104.0. 3 d) On April 2, 2011, $1,000,000 of the Series C Convertible bonds were converted into common shares. The closing market price of the shares this day was $54 per share. 2 e) On April 3, 2011, the company decided to by to induce conversion of more Series C Convertible bonds by changing the deal so that each bond was convertible into 22 shares. The closing market price of the shares this day was $50 per share and $1,000,000 of bonds were converted on this offer. The market price of the bonds this day was quoted \"over the counter\" at 104.0 3

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