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9. Pina Corporation sold 260 convertible, 10-year bonds at par for $260,000. Each bond pays 5% annual interest and each bond can be converted to

9. Pina Corporation sold 260 convertible, 10-year bonds at par for $260,000. Each bond pays 5% annual interest and each bond can be converted to ten common shares at the bondholders request. When the bonds were issued common shares were trading for $11 per share. The market rate of interest for similar bonds without conversion rights was 7%. Prepare the journal entry to record the issuance of the bonds.

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