Newmarket Corp. has \(\$ 1,000,000\) of convertible bonds payable outstanding, with a bond premium of \(\$ 20,000\) also on the books. The bondholders have notified Newmarket that they wish to convert the bonds into stock. Specifically, the bonds may be converted into 400,000 shares of Newmarket's \(\$ 1\) par common stock.

1. What is Newmarket's carrying amount of its convertible bonds payable prior to the conversion? 

2. Journalize Newmarket's conversion of the bonds payable into common stock. No explanation is required.