Problem 14-19 (Static) Convertible bonds; induced conversion; bonds with detachable warrants; disclosure note [LO14-5] Bradley-Link's December 31, 2024, balance sheet included the following items: ($ in Long-Term Liabilities millions) 9.6% convertible bonds, callable at 101 beginning in 2025, due 2028 (net of unamortized discount of $2) [note 8] $ 198 10.4% registered bonds callable at 104 beginning in 2034, due 2038 (net of unamortized discount of $1) [note 8] 49 Shareholders' Equity Equitystock warrants 4 Note 8: Bonds (in part) The 9.6% bonds were issued in 2011 at 97.5 to yield 10%. Interest is paid semiannually on June 30 and December 31. Each $1,000 bond is convertible into 40 shares of the Company's no par common stock. The 10.4% bonds were issued in 2015 at 102 to yield 10%. Interest is paid semiannually on June 30 and December 31. Each $1,000 bond was issued with 40 detachable stock warrants, each of which entitles the holder to purchase one share of the Company's no par common stock for $25, beginning 2025. On January 3, 2025, when Bradley-Link's common stock had a market price of $32 per share, Bradley-Link called the convertible bonds to force conversion. Ninety percent were converted; the remainder were acquired at the call price. When the common stock price reached an all-time high of $37 in December of 2025, 40% of the warrants were exercised. Required: 1. Prepare the journal entries that were recorded when each of the two bond issues was originally sold in 2011 and 2015. 2. Prepare the journal entry to record (book value method) the conversion of 90% of the convertible bonds in January 2025 and the retirement of the remainder. 3. Assume Bradley-Link induced conversion by offering $150 cash for each bond converted. Prepare the journal entry to record (book value method) the conversion of 90% of the convertible bonds in January 2025. 4. Assume Bradley-Link induced conversion by modifying the conversion ratio to exchange 45 shares for each bond rather than the 40 shares provided in the contract. Prepare the journal entry to record (book value method) the conversion of 90% of the convertible bonds in January 2025. 5. Prepare the journal entry to record the exercise of the warrants in December 2025. Complete this question by entering your answers in the tabs below. Required Required |Required Required Required 1 2 3 4 5 Prepare the journal entries that were recorded when each of the two bond issues was originally sold in 2011 and 2015. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answer in millions (i.e., 10,000,000 should be entered as 10) Show less No Event General Journal Debit Credit 1 1 Cash 193,050 X Discount on bonds payable 4,950,00X Convertible bonds payable 198,000 X 3333 333 2 2 Cash 49,980,0X Discount on bonds payable 3,000,00X Bonds payable 49,000,0X Equity - stock warrants 4,000,00 X Complete this question by entering your answers in the tabs below. Required Required Required Required Required 1 2 3 4 5 Prepare the journal entry to record (book value method) the conversion of 90% of the convertible bonds in January 2025 and the retirement of the remainder. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5) Show less No Event General Journal Debit Credit 1 1 Convertible bonds payable 178,200 X Discount on bonds payable V 4,455,000.0 X Common stock V 182,655 X 2 2 Convertible bonds payable V 19,800,0X. Loss on early extinguishment V 495,000 X Discount on bonds payable V 97,000.0 X Cash 3 20,392,0X. *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.Complete this question by entering your answers in the tabs below. Required Required Required Required Required 1 2 3 4 5 Assume Bradley-Link induced conversion by offering $150 cash for each bond converted. Prepare the journal entry to record (book value method) the conversion of 90% of the convertible bonds in January 2025. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5) Show less No Event General Journal Debit Credit 1 1 Convertible bonds payable 178,200 X Conversion expense 26,730,0X. Discount on bonds payable 3 3 33 4,455,000.0 X Common stock 208,935 X Cash 26,730,0X. *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.Complete this question by entering your answers in the tabs below. Required Required Required Required Required 1 2 3 4 5 Assume Bradley-Link induced conversion by modifying the conversion ratio to exchange 45 shares for each bond rather than the 40 shares provided in the contract. Prepare the journal entry to record (book value method) the conversion of 90% of the convertible bonds in January 2025. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5) Show less No Event General Journal Debit Credit 1 1 Convertible bonds payable 178,200 X Conversion expense 4,455,00 X ) Discount on bonds payable 8,019,00 X) Common stock 174,636 X Complete this question by entering your answers in the tabs below. Required Required Required Required Required 1 2 3 4 5 Prepare the journal entry to record the exercise of the warrants in December 2025. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5) Show less A No Event General Journal Debit Credit 1 1 Cash 40,000,0X. Equity - stock warrants 303 1,600,00 X ) Common stock 41,600,0X