Cullumber Capital Ltd. issued 850 $1,000 bonds at 102. Each bond was issued with 10 detachable stock warrants. After issuance, similar bonds were sold at 96, and the warrants had a fair value of $3.50. Assume that Cullumber Capital Ltd. follows IFRS and recorded the issuance of the bonds and warrants accordingly. On a date when the bonds had a carrying value of $490,700, Bantry paid $12,000 to the bondholders to induce early conversion.

Record the conversion using the book value method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Account Titles and Explanation Debit Credit Loss on Redemption of Bonds 478700 Bonds Payable 51000 Bonds Payable 12000 Retained Earnings 359300 cash 12000