Bradley-Link’s December 31, 2018, balance sheet included thefollowing items: Long-Term Liabilities ($ in millions)...

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Bradley-Link’s December 31, 2018, balance sheet included thefollowing items: Long-Term Liabilities ($ in millions) 8.0%convertible bonds, callable at 102 beginning in 2019, due 2022 (netof unamortized discount of $2) [note 8] $198 11.0% registered bondscallable at 105 beginning in 2028, due 2032 (net of unamortizeddiscount of $1) [note 8] 61 Shareholders’ Equity 7 Equity—stockwarrants Note 8: Bonds (in part) The 8.0% bonds were issued in 2005at 98.0 to yield 10%. Interest is paid semiannually on June 30 andDecember 31. Each $1,000 bond is convertible into 50 shares of theCompany’s no par common stock. The 11.0% bonds were issued in 2009at 103 to yield 10%. Interest is paid semiannually on June 30 andDecember 31. Each $1,000 bond was issued with 50 detachable stockwarrants, each of which entitles the holder to purchase one shareof the Company’s no par common stock for $30, beginning 2019. OnJanuary 3, 2019, when Bradley-Link’s common stock had a marketprice of $37 per share, Bradley-Link called the convertible bondsto force conversion. 90% were converted; the remainder wereacquired at the call price. When the common stock price reached anall-time high of $42 in December of 2019, 40% of the warrants wereexercised. Required: 1. Prepare the journal entries that wererecorded when each of the two bond issues was originally sold in2005 and 2009. 2. Prepare the journal entry to record (book valuemethod) the conversion of 90% of the convertible bonds in January2019 and the retirement of the remainder. 3. Assume Bradley-Linkinduced conversion by offering $170 cash for each bond converted.Prepare the journal entry to record (book value method) theconversion of 90% of the convertible bonds in January 2019. 4.Assume Bradley-Link induced conversion by modifying the conversionratio to exchange 55 shares for each bond rather than the 50 sharesprovided in the contract. Prepare the journal entry to record (bookvalue method) the conversion of 90% of the convertible bonds inJanuary 2019. 5. Prepare the journal entry to record the exerciseof the warrants in December 2019.

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in millions in millions 1 Debit Credit Convertible Bonds 2005 issue Cash98 x 200 million 19600 Discount on bonds difference 400 Convertible bonds payable face amount 20000 Bonds With Warrants 2009 issue Cash103 x 62million See Answer

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In: AccountingBradley-Link’s December 31, 2018, balance sheet included thefollowing items: Long-Term Liabilities ($ in millions) 8.0%...Bradley-Link’s December 31, 2018, balance sheet included thefollowing items: Long-Term Liabilities ($ in millions) 8.0%convertible bonds, callable at 102 beginning in 2019, due 2022 (netof unamortized discount of $2) [note 8] $198 11.0% registered bondscallable at 105 beginning in 2028, due 2032 (net of unamortizeddiscount of $1) [note 8] 61 Shareholders’ Equity 7 Equity—stockwarrants Note 8: Bonds (in part) The 8.0% bonds were issued in 2005at 98.0 to yield 10%. Interest is paid semiannually on June 30 andDecember 31. Each $1,000 bond is convertible into 50 shares of theCompany’s no par common stock. The 11.0% bonds were issued in 2009at 103 to yield 10%. Interest is paid semiannually on June 30 andDecember 31. Each $1,000 bond was issued with 50 detachable stockwarrants, each of which entitles the holder to purchase one shareof the Company’s no par common stock for $30, beginning 2019. OnJanuary 3, 2019, when Bradley-Link’s common stock had a marketprice of $37 per share, Bradley-Link called the convertible bondsto force conversion. 90% were converted; the remainder wereacquired at the call price. When the common stock price reached anall-time high of $42 in December of 2019, 40% of the warrants wereexercised. Required: 1. Prepare the journal entries that wererecorded when each of the two bond issues was originally sold in2005 and 2009. 2. Prepare the journal entry to record (book valuemethod) the conversion of 90% of the convertible bonds in January2019 and the retirement of the remainder. 3. Assume Bradley-Linkinduced conversion by offering $170 cash for each bond converted.Prepare the journal entry to record (book value method) theconversion of 90% of the convertible bonds in January 2019. 4.Assume Bradley-Link induced conversion by modifying the conversionratio to exchange 55 shares for each bond rather than the 50 sharesprovided in the contract. Prepare the journal entry to record (bookvalue method) the conversion of 90% of the convertible bonds inJanuary 2019. 5. Prepare the journal entry to record the exerciseof the warrants in December 2019.