On January $1,2023,$ Slug Corporation issued $$5\mathrm{.}1$ million of $10\%,10-$year convertible bonds at $102.$ The bonds pay interest on June $30$ and December $31.$ Each $$1,000$ bond is convertible into $40$ shares of $$1$ par common stock. Fuzz Company purchased $40\%$ of the issue as an investment. On July $1,2027,$ Fuzz converted all of its bonds into common stock of Slug. The market price per share for Slug was $$23$ at the time of the conversion. Both companies use the straight$-$line method for amortization.

Required:

$1.$ Prepare journal entries for the issuance of the bonds on the issuer and the investor books.

$2.$ Prepare the journal entries for the conversion on the books of the issuer and the investor.