Nolan Corporation has outstanding convertible bonds with a face value of $15,000 and a current book value of $17,500. Each $1,000 bond is convertible into 25 shares of common stock (par value $5 per share). All the bonds are converted into common stock on June 1 when the market value of Nolan's common stock is $50 per share. Recording Bond Issuance Instructions On January 1,2016 , Knorr Corporation issued $1,000,000 of 9%,5-year bonds dated January 1,2016 . The bonds pay interest annually on December 31 . The bonds were issued to yield 10%. Bond issue costs associated with the bonds totaled $18,000. Required: Prepare the journal entries to record the following