Carla Inc. issued $5,625,000 of convertible 5-year bonds on July 1, 2025. The bonds provide for 6% interest payable semiannually on January 1 and July 1. The discount in connection with the issue was $102,000, which is being amortized monthly on a straight-line basis. The bonds are convertible after one year into 15 shares of Carla Inc.s $1 par value common stock for each $1,000 of bonds. On October 1, 2026, $675,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion, any accrued interest on bonds being converted is paid in cash. Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates.

(a)		October 1, 2026. (Assume the book value method is used.)
(b)		October 31, 2026.

(c)December 31, 2026, including closing entries for end-of-year.

I need help answering this question, especially part c, following the sequence of the journal entries in the attached picture.

No. Date (a) Oct. 1, 2026 (To record conversion of bonds to common stock) Oct.1,2026 (To record payment of interest due on converted bonds) (b) Oct. 31,2026 (To record amortization of discount on bonds) Oct.31,2026 (To record accrual of interest payable on bonds) (c) Dec. 31, 2026 (To record amortization of discount on bonds) Dec.31,2026 (To record accrual of interest payable on bonds) Dec.31,2026 (To close expense account)