On January 1, 2018, Legoria Co. issued $50 Million of 7%, 10-year bonds at $51.9 million. Legoria Co issued similar, but nonconvertible bonds at 99 (that is, 99% of face amount). The Bonds pay interest semiannually on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of $1 par common stock. Legoria Co. amortizes the bond using straight-line.

On June 30, 2020 Legoria Co called in all of the bonds at a 4% premium. On June 30, 2020 Legoria Co paid the semiannual interest and issued the requisite number of shares for the bonds being converted.

1.	Prepare the journal entry(s) for the issuance of the bond on January 1, 2018
2.	Prepare the journal entry(s) for the December 31, 2019 interest payment by Legoria Co., assuming that Legoria Co. uses straight-line amortization.
3.	Prepare the journal entries on June 30, 2020 for the interest payment by Legoria Co. and the conversion of the bonds.
4)	Describe the underlying theory of why you recorded the Convertible Bond the way you did in part 1.