FACTS Clinger Company issued $$2,000,000$ of $5\%,10-$year convertible bonds on April $1,2025,$ at $98.$ The bonds pay interest on October $1$ and April $1.$ Bond discount is amortized semiannually on a straight$-$line basis. On April $1,2026,$ $$1,500,000$ of these bonds were converted into $30,000$ shares of $$2$ par value common stock.

INSTRUCTIONS

a$.$Prepare the entry to record the issuance of the bonds on April $1,2025.$

b$.$Prepare the entry $($entries$)$ to record the conversion on April $1,2026.($Book value method is used.$)$ Assume that the entry to record amortization of the bond discount and interest payment has been made.

c$.$Assume now that instead of convertible bonds, Clinger issued $$2,000,000$ bonds without a conversion feature at $102$ on April $1,2025.$ Each $$1,000$ face value bond was issued with one detachable stock warrant. Shortly after issuance, the bonds were selling at $98.$ The warrants had a fair value of $$30.$ Prepare the entry to record the issuance of the bonds and warrants.