On January $1,2021,$ Gless Textiles issued $$28$ million of $7\%,10-$year convertible bonds at $101.$ The bonds pay interest on June $30$ and December $31.$ Each $$1,000$ bond is convertible into $40$ shares of Gless$$s no par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at $99($that is$,99\%$ of face amount$).$ Century Services purchased $20\%$ of the issue as an investment.

Required:

$1.$ Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century.

$2.$ Prepare the journal entries for the June $30,2025,$ interest payment by both Gless and Century assuming both use the straight$-$line method.

$3.$ On July $1,2026,$ when Gless$$s common stock had a market price of $$33$ per share, Century converted the bonds it held. Prepare the journal entries by both Gless and Century for the conversion of the bonds $($book value method$).$