LTZ recently issued convertible 8% $100 million par, 20-year, for $103 million. Each $1,000 bond is convertible into 40 shares of LTZ $1 par common stock. The market price per share is $15 per share. The nonconvertible bonds have a fair value of $98 million.

1.) Report the issuance of convertible bonds.

2.) Report the conversion of 50,000 bonds to equity. At conversion, the balance in the premium account is $2 million.

3.) To induce the remaining bonds for conversion, LTZ paid an additional $50 per bond. (outstanding premium was $0.5 million)