r 14 Long-Term Liabilities: Bonds and Notes ercises xercises OBJ. 1 p.679 PE 14-1A Alternative financing plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2 issue 5% bonds (at face value) Issue preferred $1 stock, $20 par Issue common stock, $25 par $6,000,000 $2,000,000 6,000,000 4,000,000 6,000,000 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. 79 PE 14-1B Alternative financing plans OBJ. 1 Brower Co. is considering the following alternative financing plans: Plan 1 Plan 2 issue 10% bonds (at face value) lecuo preferred $2 50 stock. $25 par $4,000,000 $2,500,000 3,000,000 pays semiannual interest of $50,000 ($2,500,000 Journalize the bond issuance. 4%.x ), receiving cash of $2.30037) PE 14-3B On the first day of the fiscal year, a company issues a $3,000,000, 11%, five-year that pays semiannual interest of $165,000 ($3,000,000 x 11% x 40, receiving cash of $2,889,599. Journalize the bond issuance. 683 Issuing bonds at a discount OBJ. 3 bond OBJ. 3 the