2. On January 1, 2019, Kate Products issued five-year convertible bonds of $400,000. Interest is payable semi-annually on June 30 and December 31 at a rate of 10%. The effective yield is 6%. Each $1,000 bond can be convertible into six shares of Kate Products' ordinary shares starting from January 1, 2021. Assume without the convertible option, investors would demand a yield of 8%. Following the with-and-without method, prepare journal entry for Kate on January 1, 2019, regarding the bond issuance