Computalog Inc. showed the following on its December 31, 2023, balance sheet: Bonds payable, convertible $ 4,110,000 Less: Unamortized discount 14,796 $ 4,095,204

Required: 1. Assuming the bonds are convertible into 411,000 common shares, journalize the conversion on January 1, 2024, when the market value per common share was $10.25.

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