Practice Exercises Example Exercises OBJ. 1 EE 14-1 A 679 PE 14-1A Alternative financing plans Frey Co. is considering the following alternative financing plans: Show Me How Plan 2 Plan 1 $2,000,000 Issue 5% bonds (at face value) $6,000,000 6,000,000 Issue preferred$1 stock, $20 par 4,000,000 6,000,000 Issue common stock, $25 par Income tax is estimated at 40% of income. Determine the earnings per share of common stock, assuming that income before bond interest and income tax is $800,000 Example Exercises Bond investment transactions OBJ. 2 EE 15-1 p725 PE 15-1A Journalize the entries to record the following selected bond investment transactions for Hall Trust: a. Purchased for cash $240,000 of Medina City 6 % bonds at 100 plus accrued interest of $3.600 Show Me How b. Received first semiannual interest payment. c. Sold $120,00o of the bonds at 98 plus accrued interest of $600