uary 1 2020, Grand Corporation issued $100,000 of 9% (cash payable each June 30 and December 31) I bonds payable (convertible and callable) at a 10% market rate of interest. Each $1,000 bond is convert Problem 16-95 the option of the holder, into Grand common stock (par $10) as follows: first five years-25 shares for for Conventble Deb each bond tendered; second five years-20 shares for each bond. The bond after the fifth year at 101. Redeemable Deb L02, 4, 7,8 at the option of Grand, On July 1, 2026, the market rate on comparable bonds is 8%, and the common stock is quoted on the market at $52 per share Required a. Provide b. the entry to record issuance of bonds on January 1, 2020. Show computation of the bond isse price. Provide the entry to record payment of bond interest and the amortization of hond premium or discount on June 30, 2020. Use the effective interest method. . Prepare the journal entries at July 1,2026, to record each of the following separate assumptions (use straight line amortization). I. Assumption A: All of the bondholders converted their bonds to common stock. Use the book value method to record the conversion. Assumption B: Grand called all of the bonds at the stipulated call price. Assumption C: Grand refunded all of the outstanding 9% bonds by purchasing them in the open market at the current yield rate of interest. Cash for the refunding was obtained by issuing new 8% bonds (cash interest payable semiannually) at par; cash proceeds were $103,000 (face amount of bonds sold) 2. 3 Which of the three alternative means of retiring the old 9% bonds s most likely to ccur ifech is available to investors? Why? d. 90n 00M two- year Problem 16-96