Computalog Inc. showed the following on its December $31,2023,$ balance sheet:

Bonds payable, convertible $ $4,040,000$

Less: Unamortized discount $14,544$ $ $4,025,456$

Required:

$1.$ Assuming the bonds are convertible into $404,000$ common shares, journalize the conversion on January $1,2024,$ when the market value per common share was $$10\mathrm{.}25.$

$2.$ How will the conversion of bonds into common shares affect the elements of the balance sheet $($assets$,$ liabilities, equity$)?$