E16-1 1-
Cash 9,900,000
Discount on Bonds Payable 100,000 Bonds Payable 10,000,000

Unamortized Bond Issuance Costs 70,000 Cash 70,000
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2-
Cash 9,800,000
Discount on Bonds Payable 600,000 Bonds Payable 10,000,000 PIC – Stock Warrants (100,000 warrants) 400,000
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3-
Debt Conversion Expense 75,000
Bonds Payable 10,000,000 Discount on Bonds Payable 55,000 Common Stock 1,000,000 PIC in Excess of Par 8,945,000 Cash 75,000

E16-6
December 31, 2012.
Bond Interest Expense 117,000
Premium on Bonds Payable (60,000 x 1/20) 3,000 Cash (3,000,000 x 8% x 6/12) 120,000
January 1, 2013.
Bonds Payable 600,000
Premium on Bonds Payable 9,600 Common Stock (8 x 100 x 600,000/1,000) 480,000 PIC in Excess of Par 129,600
March 31, 2013.
Bond Interest Expense 11,625
Premium on Bonds Payable (12,000 / 8 x 3/12) 375 Bond Interest Payable (600,000 x 8% x 3/12) 12,000

Bonds Payable 600,000
Premium on Bonds Payable 11,625 Common Stock 480,000 PIC in Excess of Par 121,625
June 30, 2013.
Bond Interest Expense 58,875
Premium on Bonds Payable 1,125
Bond Interest Payable (600,000 x 8% x 3/12) 12,000 Cash (1,800,000 x 8% x 6/12) 72,000

E16-8
Journal
Cash 3,150,000
Unamortized Bond Issuance Costs 30,000 Bonds Payable 3,000,000 Premium on Bonds Payable 102,000 PIC – Warrants 18,000 Bond Interest Expense 60,000

Premium on Bonds Payable
Sales Price (3,000 x 1,000 x 1,04) 3,120,000
(-) Face Value 3,000,000
(-) Value of Warrants (3,000 x 2 x 3) 18,000
(=) Premium 102,000

Accrued Interest
Face Value