1. Zurg, Inc. is an SEC registrant, and its securities are thinly traded on NASDAQ (National Association of Securities Dealers Quotes). Zurg, Inc. issued 9,500 units. Each unit consists of a $1,000 par, 16% subordinated debenture and 5 shares of $5 par common stock. The 9,500 units were sold to outside investors for cash at $1,150 per unit. Prior to this sale the 2-week ask price of common stock was $25 per share. Sixteen percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. Prepare the journal entry to record the previous transaction, under the following conditions. (1) Employing the incremental method.