A Company issued a convertible bond payable on the interest payment date as follows.

Bonds payable	$700,000
Coupon rate	5.3%
Issue price	$725,000
Term	10 years
Each $1,000 bond is convertible into	20 shares
Number of potential shares if 100% converted	14,000 shares
Bond conversion date	December 31, 20X3
Bonds converted	30%

1.What is the credit to additional paid in capital at the time of conversion on December 31, 20X3?

2. What is interest expense for the year ended December 31, 20X4?