Exercise $14-24($Algo$)$ Convertible bonds; straight$-$line interest $[$L$014-5]$

On January $1,2024,$ Gless Textiles issued $$19$ million of $8\%,10-$year convertible bonds at $101.$

The bonds pay interest on June $30$ and December $31.$

Each $$1,000$ bond is convertible into $40$ shares of Gless's no par common stock.

Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at $99($that is$,99\%$ of face amount$).$

Century Services purchased $15\%$ of the issue as an investment.

Required:

Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century.

Prepare the journal entries for the June $30,2028,$ interest payment by both Gless and Century assuming both use the straight$-$

line method.

On July $1,2029,$ when Gless's common stock had a market price of $$33$ per share, Century converted the bonds it held. Prepare

the journal entries by both Gless and Century for the conversion of the bonds $($book value method$).$

Complete this question by entering your answers in the tabs below.

Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Enter your answers in

whole dollars.

Journal entry worksheet

$\backslash$table$[[1,2]]$

Record the issuance of the bonds by Gless.

Note: Enter debits before credits.