intermediate accounting 2 homework ch16

1.G issued $5,000,000 of 6%, 5-year convertible bonds on 07-01-14 when the market rate for similar bonds was 6.25%. The bonds were dated 07-01-14 with interest payable January 01 and July 01. G incurred and paid $105,000 of bond issuance costs. On 07-01-16 after making all of its interest payments, 60% of the bonds were converted into 9,000 shares of G’s $0.01 par value common stock. G only prepares AJEs every December 31. Prepare the entries G should make on:

(a) 07-01-14

(b) 12-31-14

(c) 01-01-15

(d) 07-01-15

(e) 07-01-16

(f) 12-31-16

(g) 01-01-17

2.On 01-01-15, J had 800,000 shares of common stock issued and outstanding. The following occurred during 2015:

•On March 1, J’s employees exercised 12,000 stock options at an exercise price of $25 per share. Each option allowed the employee to acquire one share of J’s common stock.

•On August 1, J declared and distributed a 10% stock dividend.

•On October 1, J reacquired 15,000 shares of its common stock.

•On December 1, J issued 5,000 shares of its treasury stock.

J’s net income for 2015 was $3,400,000. What will J report as basic EPS for the year ended 12-31-15?ROUND TO NEAREST PENNY.

3.On 01-01-14, H had 2,820,000 shares of common stock issued and outstanding and 25,000 shares of 5%, $50 par value cumulative preferred stock issued and outstanding. On 09-30-14, H issued 240,000 shares of its common stock for $63 per share. H’s net income for 2014 was $3,246,000. During 2014 H paid no dividends. H’s income tax rate is 24%.

•As of 12-31-14, H had $3,000,000 of 5%, 10-year convertible bonds outstanding. H issued the bonds at par during 2011. The bonds can be converted into 40,000 shares of H’s common stock.

•As of 12-31-14, H had $5,000,000 of 10%, 15-year convertible bonds. H issued the bonds at par during 2004. The bonds can be converted into 90,000 shares of H’s common stock.

•As of 12-31-14, H had $6,000,000 of 17%, 40-year convertible bonds. H issued the bonds at par during 1980. The bonds can be converted into 100,000 shares of H’s common stock.

•During the entire year ending 12-31-14, H had 240,000 outstanding and exercisable employee stock options that were granted to employees during 2013. Each option has an exercise price of $48 per share of H common stock. During 2014, the average market price of H’s common stock was $60 per share.

•During the entire year ending 12-31-14, H had 120,000 outstanding and exercisable employee stock options that were granted to employees during 2010. Each option has an exercise price of $62 per share of H common stock.

What will H report as basic EPS for the year ended 12-31-14?ROUND TO NEAREST PENNY.

What will H report as diluted EPS for the year ended 12-31-14?ROUND TO NEAREST PENNY.

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