2) Montague Company issued 10-year convertible bonds on July 1, 20x5, as follows: Par value of bonds Stated interest rate Issuance price of bonds 1,200,000 5% 104 plus accrued interest March 1, 20x5 March 1 and September 1 Straight-line Bonds are dated Interest payable semiannually Amortization method used On September 1, 20x7, bonds were converted into 20,000 shares of $15 par value common stock. Accrued interest was paid in cash at the time of the conversion. 160961 Percentage of outstanding bonds converted: REQUIRED Determine the amount of interest expense reported on the income statement for a) the year ended December 31, 20x5. Using the book value method, prepare the entry(ies) to record the bond conversion on September 1, 20x7. (Assume the entry to record the interest payment and amortization has already been made.) b)