On January 1, 2017, Kepler Corporation, issued $5,000,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into five shares of Derrick Corporation $100 par value common stock after December 31, 2018.

On January 1, 2019, $500,000 of debenture are converted into common stock, which is then selling at $120. An additional $500,000 of debenture are converted on March 31, 2019. The market price of the common stock is then $110. Accued interest at March 31 will be paid on the next interest date

Bond premium is amortized on a straight-line basis.

The journal entry, on March 31, 2019, to recognize the conversion of the bonds must debited the Premium on Bonds payable account for the amount of:

	a.	$7,750
	b.	$6,200
	c.	$16,000
	d.	$8,000