Cheyenne AG issues 2,100 convertible bonds at January 1, 2022. The bonds have a 3-year life and are issued at par with a face value of 1,000 per bond, giving total proceeds of 2,100,000. Interest is payable annually at 6%. Each bond is convertible into 250 ordinary shares (par value of 1). When the bonds are issued, the market rate of interest for similar debt without the conversion option is 8%. Cheyenne AG converts its convertible bonds on January 1, 2023.

Compute the carrying value of the bond payable on January 1, 2023. (Round answer to 0 decimal places, e.g. 5,225.) Carrying value 2,025,099 (b) Your answer is partially correct. Prepare the journal entry to record the conversion on January 1, 2023. (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.) Date Account Titles and Explanation Debit Credit January Share Premium-Conversion Equity 74901 1, 2023 Bonds Payable 2025099 Share Capital-Ordinary 500000 Share Premium-Ordinary 1600000