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E16-6 ( Conversion of Bonds )
On January 1 , 2014 , Gottlieb Corporation issued $ 4,000,000 of 10- year , 8 % convertible debentures at 102 . Interest is to be paid semiannually on June 30 and December 31 . Each $ 1,000 debenture can be converted into eight shares of Gottlieb Corporation $ 100 par value common stock after December 31 , 2015 .
E16-7 ( Issuance of Bonds with Warrants )
Illiad Inc . has decided to raise additional capital by issuing $ 170,000 face value of bonds with a coupon rate of 10 %. 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 $ 136,000 , and the value of the warrants in the market is $ 24,000 . The bonds sold in the market at issuance for $ 152,000 .
E16-12