Garr Co. issued $4,058,000of12%,5-year convertible bonds on December 1, 2017 for $4,075,145plus accrued interest. The bonds were dated April 1, 2017 with interest payable April 1 and October 1. Bond premium is amortized each interest period on a straight-line basis. Garr Co. has a fiscal year end of September 30.

On October 1, 2018, $2,029,000of these bonds were converted into29,000shares of $15par common stock. Accrued interest was paid in cash at the time of conversion.

part 1

Prepare the entry to record the interest expense at April 1, 2018. Assume that interest payable was credited when the bonds were issued.

part 2

Prepare the entry to record the conversion on October 1, 2018. Assume that the entry to record amortization of the bond premium and interest payment has been made.