MontyCorporation sold190convertible, 10-year bonds withface value$190,000.The bonds pay interest December 31 each year.Each bond pays4% annual interest and each bond can be converted to ten common shares at the bondholders' request. The sale resulted in conversion rights of $27,969.

On January 1, 2021,Montyoffered the shareholders a price of105if they would agree to retire their bonds early. All of the bondholders agreed to retire their bonds early. At the time of the conversion, the market value of the bonds was $170,000and the carrying value was $167,000.

Prepare the journal entry to record the conversion of the bonds into common share.