A company issued 100,000 preferred shares and received proceeds of $6,500,000. These shares have a benchmark price of $60 per share and pay cumulative dividends of $4 per share. Buyers of the preferred shares also received a detachable warrant with each share purchased. Each warrant gives the holder the right to buy one common share at $30 per share within 10 years. The underwriter estimated that the market value of the preferred shares alone, excluding the conversion rights, is approximately $62 per share. Shortly after the issuance of the preferred shares, the detachable warrants traded at $3 each.

On February 18, 2025, 35% of the warrants were exercised. The market value of the common shares at the date of the conversion was $65 per share.

Prepare the journal entry to record the exercise of the warrants on February 18, 2025.