Question 1 On December 31, 20x0, the Ravi Corporation, a publicly accountable entity, issued $40,000,000, 25 year, 4% convertible bonds for total proceeds of $39,800,000. The bonds pay interest semi-annually on June 30 and December 31 of each year. The bonds would have yielded 4.2% had they not been convertible. The bonds are convertible at the option of the bondholders. Required a) Prepare the journal entries on the following dates: - Dec 31, 20x0 - Jun 30, 20x1 - Dec 31, 20x9 - Jul 1, 20x13 40% of the bonds are converted - Dec 31, 20x15 - Dec 31, 20x25 the remaining bonds are refunded b) Assume now that the bonds are mandatorily convertible on December 3, 20x25. - Write the journal entries on the following dates: - Dec 31, 20x0 - June 30, 20x1 - Dec 31, 20x1 - Dec 31, 20x25

Question 2 On September 1, 20x5, the Albatross Corporation, a publicly accountable entity, issued a stock option grant to its senior managers. A total of 15,000 stock options were issued at an exercise price of $22. The fair value of the grant was the following: September 1, 20x5 $117,000 December 31, 20x5 122,000 December 31, 20x6 175,000 September 1, 20x7 143,000 December 31, 20x7 184,000 The options vest on September 1, 20x7 and the exercise period ends on June 30, 20x8. Albatross year-end is December 31 and management estimates the following % vesting: December 31, 20x5 85% Est. December 31, 20x6 90% Est. September 1, 20x7 88% Actual On September 2, 20x7, 70% of the options were exercised. The remaining options were all exercised on June 30, 20x8. Required Write all of the journal entries for the duration of the stock option plan.

Question 3 On January 2, 20x3, the Bevin Corporation, a publicly accountable entity, issued 300,000 Share Appreciation Rights to its employees. The SARS vest on June 30, 20x3 and the exercise period ends on December 31, 20x6. Data on the plan is as follows: Date Fair value of each SAR Average cash payment made for SARs exercised Management estimate of SARs vesting January 2, 20x3 $5.50 - 93% December 31, 20x3 4.40 - 91% December 31, 20x4 6.90 - 86% June 30, 20x5 9.10 - 82% Actual December 31, 20x5 5.20 $6.00 December 31, 20x6 - 7.40 A total of 105,000 SARs were cashed out in 20x5 and the remaining SARs were cashed out in 20x6. Required a) Set up a large T-Account for the SAR Liability account showing all entries into the account for the period January 2, 20x3 to December 31, 20x6. b) Write all of the journal entries for the period January 2, 20x3 to December 31, 20x6. must be typed up in Excel