Question 1. On May 1, Friendly Company issued 2,000 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Immediately after issuance, bonds had a fair value of $1,960,000, and warrants had a fair value of $80,000.

Make the journal entries on May 1 for the investor who purchased the bonds and detachable stock warrants.

Assume Friendly Companys 2,000 $1,000 bonds mature in 10 years. When the bonds mature, what are the journal entries for the issuer and the investor, respectively?