1 E16-6 (Conversion of Bonds) On January 1, 2014, Gottlieb Corporation issued $4,000,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into eight shares of Gottlieb Corporation $100 par value common stock after December 31, 2015.

On January 1, 2016, $400,000 of debentures is converted into common stock, which is then selling at $110. An additional $400,000 of debentures is converted on March 31, 2016. The market price of the common stock is then $115. Accrued interest at March 31 will be paid on the next interest date.

Bond premium is amortized on a straight-line basis.

Use book value method

Prepare JE's for Dec 31, 2015, January 1, 2016, March 31, 2016 and June 30, 2016.