Illiad inc has decided to raise additional capital by issuing

Brief Exercise 16-1 Archer Inc. issued $4,240,200 par value, 7% convertible bonds at 99 for cash. If the bonds had not included the conversion feature, they would have sold for 95. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Brief Exercise 16-6 On January 1, 2014, Barwood Corporation granted 5,320 options to executives. Each option entitles the holder to purchase one share of Barwood’s $5 par value common stock at $50 per share at any time during the next 5 years. The market price of the stock is $68 per share on the date of grant. The fair value of the options at the grant date is $160,700. The period of benefit is 2 years. Prepare Barwood’s journal entries for January 1, 2014, and December 31, 2014 and 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit 1/1/14 12/31/14 12/31/15 Brief Exercise 16-11 Tomba Corporation had 412,800 shares of common stock outstanding on January 1, 2014. On May 1, Tomba issued 53,400 shares. (a) Compute the weighted-average number of shares outstanding if the 53,400 shares were issued for cash. Weighted-average number of shares outstanding $ (b) Compute the weighted-average number of shares outstanding if the 53,400 shares were issued in a stock dividend. Weighted-average number of shares outstanding $ Exercise 16-1 For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Grand Corp. issued $20,174,000 par value 11% convertible bonds at 97. If the bonds had not been convertible, the company’s investment banker estimates they would have been sold at 95. Expenses of issuing the bonds were $76,000. 2. Hoosier Company issued $20,174,000 par value 11% bonds at 96. One detachable stock warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $5. 3. Suppose Sepracor, Inc. called its convertible debt in 2014. Assume the following related to the transaction: The 12%, $10,408,000 par value bonds were converted into 1,040,800 shares of $1 par value common stock on July 1, 2014. On July 1, there was $64,100 of unamortized discount applicable to the bonds, and the company paid an additional $77,800 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation 1. (To record bond issue) (To record bond issue costs) 2. 3. Debit Credit Exercise 16-7 Illiad Inc. has decided to raise additional capital by issuing $179,000 face value of bonds with a coupon rate of 12%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $142,205, and the value of the warrants in the market is $25,095. The bonds sold in the market at issuance for $163,500. (a) What entry should be made at the time of the issuance of the bonds and warrants? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit (b) Prepare the entry if the warrants were nondetachable.