Problem 1 The Wellington Company issued 9% bonds, dated January 1, with a face amount of $70 million on January 1, year 1. The bonds mature on December 31, year 10. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Required: 1.Determine the price of the bonds at January 1, year 1. 2.Prepare the journal entry to record their issuance by The Wellington Company on January 1, year 1. 3.Prepare the journal entry to record interest on June 30, year 1 (at the effective rate). 4.Prepare the journal entry to record interest on December 31, year 1 (at the effective rate). Problem 2 On December 31, year 5, Weller Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 3, year 6, Weller purchased 24 million shares of its common stock as treasury stock. Weller issued a 5% common stock dividend on July 1, year 6. Four million treasury shares were sold on October 1. Net income for the year ended December 31, year 6, was $160 million. Also outstanding at December 31 were incentive stock options granted to key executives on September 13, year 1. The options were exercisable as of September 13, year 5, for 30 million common shares at an exercise price of $53 per share. During year 6, the market price of the common shares averaged $66 per share. The options were exercised on September 1, year 6. Required: Compute Weller's basic and diluted earnings per share for the year ended December 31, year 6.