On January $1,2024,$ Madison Products issued $$40\mathrm{.}3$ million of $8\%,10-$year convertible bonds at a net price of $$41\mathrm{.}13$ million.

Madison recently issued similar, but nonconvertible, bonds at $98($that is$,98\%$ of face amount$).$

The bonds pay interest on June $30$ and December $31.$

Each $$1,000$ bond is convertible into $30$ shares of Madison$$s no par common stock.

Madison records interest by the straight$-$line method.

On June $1,2026,$ Madison notified bondholders of its intent to call the bonds at face value plus a $1\%$ call premium on July $1,2026.$

By June $30,$ all bondholders had chosen to convert their bonds into shares as of the interest payment date.

On June $30,$ Madison paid the semiannual interest and issued the requisite number of shares for the bonds being converted.

Required:

$1.$ & $2.$ Prepare the journal entries for the issuance of the bonds by Madison and interest payment for June $30,2024.$

$3.$ Prepare the journal entries for the June $30,2026,$ interest payment by Madison and the conversion of the bonds $($book value method$).$