Exercise 14-24 (Algo) Convertible bonds; straight-line interest [LO14-5]

On January 1, 2021, Gless Textiles issued $15 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 Glesss 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 10% of the issue as an investment. Required: 3. On July 1, 2026, when Glesss 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. Required 1 Required 2 Required 3 On July 1, 2026, 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). (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.) Show less No Date General Journal Debit Credit 1 July 01, 2026 1,500,000 Convertible bonds payable Premium on bonds payable 8,400 Common stock 2 July 01, 2026 Investment in common stock Investment in convertible bonds Premium on investment in bonds