On January 1, 2015, when its $30 par value common stock was selling for $70 per share, a corporation issued $20 million of 14% convertible debentures due in 10 years. The conversion option allowed the holder of each $1,000 bond to convert it into six shares of the corporation's $30 par value common stock. The debentures were issued for $21 million. At the time of issuance, the present value of the bond payments was $18.50 million, and the corporation beleves the difference between the present value and the amount paid is attributable to the conversion feature On January 1, 2016, the corporation's $30 par value common stock was spit 3 for 1. On January 1, 2017, when the corporation's $10 par value common stock was seling for $00 per share, holders of 40% of the convertible debentures exercised ther conversion options The corporation uses the straight-ine method for amortizing any bond discounts or premiums Required: Prepare the journal entry to record the original issuance of the convertible debentures 2. Prepare the journal entry to record the exercise of the conversion option, using the book value method 2 3 DATE Jan. 1 Cash Bonds Payable GENERAL JOURNAL ACCOUNT TITLE Premium on Bonds Payable K POST REF DEBT 21,000,000.00 PAGE 1 Score: 37/37 CREDIT 20,000,000.00 1,000,000.00 1 DATE Jan. 1 Bonds Payable GENERAL JOURNAL ACCOUNT TITLE Premium on Bonds Payable Additional Paid-In Capital Common Stock PAGE 1 Score: 45/49 POST REF DEST CREDIT 8,000,000.00 320,000.00 2,160,000.00 6,120,000.00 Poin