I'm *trying* to figure out convertible bonds using debentures and the conversion option using the book value method. How do you figure out the problem? I'm stuck on figuring out how to calculate the cash debit and premium on bonds payable for the first part of the problem.

This is the prompt:

On January 1, 2015, when its $30 par value common stock was selling for $80 per share, a corporation issued $10 million of 10% convertible debentures due in 10 years. The conversion option allowed the holder of each $1,000 bond to convert it into six shares of the corporation's $30 par value common stock. The debentures were issued for $11 million. At the time of issuance, the present value of the bond payments was $8.5 million, and the corporation believes the difference between the present value and the amount paid is attributable to the conversion feature. On January 1, 2016, the corporation's $30 par value common stock was split 3 for 1. On January 1, 2017, when the corporation's $10 par value common stock was selling for $90 per share, holders of 40% of the convertible debentures exercised their conversion options. The corporation uses the straight-line method for amortizing any bond discounts or premiums.

Required:

1. Prepare the journal entry to record the original issuance of the convertible debentures.
2. Prepare the journal entry to record the exercise of the conversion option, using the book value method.

This is what I've got thus far. (Don't laugh! OK you can if you want to)

General Journal Shaded cells have feedback. Prepare the journal entry to record the original issuance of the convertible debentures on January 1, 2015. How does grading work? PAGE 1 GENERAL JOURNAL Score: 30/37 DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Jan. 1 Cash 8,500,000.00 Premium on Bonds Payable Bonds Payable 10,000,000.00 Points: 5.68 /7 Feedback Check My Work Prepare the journal entry to record the exercise of the conversion option, using the book value method on January 1, 2017. How does grading work? PAGE 1 GENERAL JOURNAL Score: 41/49 DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 Jan. 1 Bonds Payable 11,000,000.00 Premium on Bonds Payable 800,000.00 Common Stock 300,000.00 al Paid-In Capital 1,808,000.00