On January 1, 2016, Bramble Company issued 10-year, $92,000 face value, 6% bonds at par (interest payable annually on January 1). Each $1,000 bond is convertible into 29 shares of Bramble $2 par value common stock. The company has had 10,000 shares of common stock (and no preferred stock) outstanding throughout its life. None of the bonds have been converted as of the end of 2017. Bramble also has adopted a stock-option plan that granted options to key executives to purchase 6,000 shares of the company’s common stock. The options were granted on January 2, 2016, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company (the service period is 2 years). The options expired 6 years from the date of grant. The option price was set at $5, and the fair value option-pricing model determines the total compensation expense to be $25,000. All of the options were exercised during the year 2018: 3,000 on January 3 when the market price was $7, and 1,000 on May 1 when the market price was $8 a share. (Ignore all tax effects.)

Prepare the journal entry Bramble would have made on January 1, 2016, to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
 

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

Prepare the journal entry to record interest expense and compensation expense in 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
 

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2017	enter an account title to record interest expense on December 31 in 2017	enter a debit amount	enter a credit amount
	enter an account title to record interest expense on December 31 in 2017	enter a debit amount	enter a credit amount
	(To record interest expense for 2017)
	enter an account title to record compensation expense on December 31 in 2017	enter a debit amount	enter a credit amount
	enter an account title to record compensation expense on December 31 in 2017	enter a debit amount	enter a credit amount
	(To record compensation expense for 2017)

Bramble’s net income in 2017 was $30,000. Compute basic and diluted earnings per share for Bramble for 2017. Bramble’s average stock price was $6 in 2017. (Round answers to 2 decimal places, e.g. 15.25.)
 

Basic Earnings Per Share		$enter a dollar amount rounded to 2 decimal places
Diluted Earnings Per Share		$enter a dollar amount rounded to 2 decimal places

Assume that 75 percent of the holders of Bramble’s convertible bonds convert their bonds to stock on June 30, 2018,when Bramble’s stock is trading at $8 per share. Bramble pays $2 per bond to induce bondholders to convert. Preparethe journal entry to record the conversion.

Answer rating: 100% (QA)

Answer In the books of Bramble Journal Entries Date Description Debit Credit 2016 Jan01 Cash 92000 B... View the full answer