Gotham Equipment Company issued $1,000,000 of convertible 10-year, 11% bonds on July 1, 2019. The interest is payable semiannually on January 1 and July 1. The discount in connection with the issue was $9,500, which is amortized monthly using the straight-line basis. The debentures are convertible after one year into five shares of the companys $1 par common stock for each $1,000 of bonds.

On August 1, 2019, $100,000 of the bonds were converted. Interest has been accrued monthly and paid as due. Any interest accrued at the time of conversion of the bonds is paid in cash.

Prepare the journal entries on Gotham's books to record the conversion, amortization, and interest on the bonds as of August 1 and August 31, 2019. On the bond issuance date, it had been at least reasonably possible that the bonds would eventually be converted.

3 4 5 6 7 8 9 Gotham Equipment Company issued $1,000,000 of convertible 10-year, 11% bonds on July 1, 2019. The interest is payable semiannually on January 1 and July 1. The discount in connection with the issue was $9,500, which is amortized monthly using the straight-line basis. The debentures are convertible after one year into five shares of the company's $1 par common stock for each $1,000 of bonds. On August 1, 2019, $100,000 of the bonds were converted. Interest has been accrued monthly and paid as due. Any interest accrued at the time of conversion of the bonds is paid in cash. Prepare the journal entries on Gotham's books to record the conversion, amortization, and interest on the bonds as of August 1 and August 31, 2019. On the bond issuance date, it had been at least reasonably possible that the bonds would eventually be converted. 10 11 12 13 14 15 16 17 18 19 20 August 1, 2019 Account 21 Debit Credit 22 23 24 25 26 August 1, 2019 Account 27 Debit Credit 28 29 30 31 32 33 34 August 31, 2019 Account 35 Debit Credit 36 37 38 39