program on January 1, 2019, which entitles executives to o not complete 3 years of employment with ournal entry (if any) on January 1, 2019, assuming the service period is 3 years. receive cash at the date of exercise for the difference between the market price of the shares and the pre-established price of $20 on 5,000 SARS. The required service period is 2 years. The fair value of the SARS are determined to be $4 on December 31, 2019, and $9 on December 31, 2020. Compute Ferraro's compensation expense for 2019 and 2020 ad 2019 net income of 1,000,000. Dur- Mend of 2 per share on 100,000 prefer- E16.1 (L01) (Issuance and Repurchase of Convertible Bonds) Angela AG issues 2,000 convert- ible bonds at January 1, 2019. The bonds have a 3-year life and are issued at par with a face value of 1,000 per bond, giving total proceeds of 2,000,000. Interest is payable annually at 6%. Each bond is convertible into 250 ordinary shares (par value of 1). When the bonds are issued, the market rate of interest for similar debt without the conversion option is 8 %. Instructions a. Compute the liability and equity component of the convertible bond on January 1, 2019 b. Prepare the journal entry to record the issuance of the convertible bond on January 1,2019 c. Prepare the journal entry to record the repurchase of the convertible bond for cash at January 1, 2022, its maturity date