24.25

The below information will be used for the next two questions.

A Company issued a bond payable with detachable warrants on the interest payment date as follows.

Bond payable ($1,000 par value; 400 bonds)	$400,000
Coupon rate	4.70%
Bond issue price	$414,000
Fair value of the bonds after issuance	$390,000
Term	10 years
Number of detachable warrants per bond	50
Fair value of the warrants after issuance	$2.00
Stock purchase price	$15.00
Warrants exercised	5,000

1 warrant = 1 share of $1 par value stock

1.

What is interest expense in 20X1?

2.

1 warrant = 1 share of $1 par value stock

What is the credit to additional paid in capital at the time the warrants are exercised on June 30, 20X1?