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1. CONVERTIBLE DEBT AT TIME OF CONVERSION - On October 1, 2018, $3,000,000 bonds were converted into 30,000 shares of $10 par common stock. At
1. CONVERTIBLE DEBT AT TIME OF CONVERSION - On October 1, 2018, $3,000,000 bonds were converted into 30,000 shares of $10 par common stock. At the time of conversion, the unamortized premium is $8,000. Prepare journal entry to record the conversion of the bonds.
2. INDUCED CONVERSIONS - Use the information from Exercise 1, but assume that the issuer agree to pay the holders of its convertibles bonds an additional $15,000 if they will convert. Prepare journal entry to record the conversion of the bonds.
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