ACCT 551 RANK Start With a Dream /acct551rank.com ACCT 551 RANK Start With a Dream /acct551rank.com | Page 45

E15-16 (Computation of Retained Earnings) The following
information has been taken from the ledger accounts of Isaac Stern
Corporation.
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ACCT 551 Week 6 Homework E16-6, E16-7, E16-12, E16-22
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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