On December 31, Year 1, Action Corporation, a public company, issues ten-year convertible bonds with a face value of $2,000,000 and a stated rate of 8%, paid semi- annually on June 30 and December 31. The bonds mature on December 31, Year 11. The bonds are issued to provide an effective yield of 7%. If these bonds did not have a conversion feature, the company would have to issue the bonds to yield 9% to attract investors. On December 31, Year 5, 60% of the bonds are converted to common shares. Required: (a) Prepare the journal entry(ies) to record the issuance of the bonds (4 marks). (b) Prepare the journal entry(ies) to record the conversion of the bond, December 31, Year 5 (3 marks). Show ALL calculations and write out account names for full marks. Round to the nearest dollar.