Assume XYZ Company issues 2,000 bonds with a par value of $100 at a $50,000 total discount. Each bond can be converted to 10 shares of common stock. The common stock has a par value of $1. Prepare the following journal entries:

a) Sale of the bonds.

b) Conversion of the bonds when $45,000 of the original discount remains unamortized. The firm offered $20,000 total to the bond holders as an incentive to convert the bonds.