On January 1, 2018, when its $30 par value common stock was selling for $60. per share, a corporation issued $20 million of 12% corvuerible debentures due in 10 yearh. The comversion 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 tar \$21 milion. At the time of issuance, the present value of the bond poyments was $18.50 million, and the corporation belioves the diflerence between the present value and the amcunt paid is attributable to the conversion feature. On January 1,2019, the corporation's $30 par value common stock was split 3 for 1, On January 1,2020 , when the corporalion's $10 par value common stock was seling for 570 per share, holders of 40% of the converible dobentures oxercised their conversion options. The corporation uses the straight-ine method fot amortizing any bond discounts or premiums. Aequired: 1. Prepure the joumat entry to record the originat issuance of the comvertble debentures. 2. Prepare the joumal entry to recond the exerase of the conversion option, using the book value method: ASSETS REVENUE 111 Cash 411 Sales Revenue 121 Accounts Receivable EXPENSES 141 Inventory 152 Prepaid Insurance 500 Cost of Goods Sold 181 Equipment 511 Insurance Expense 198 Accumulated Depreciation 512 Utilities Expense 521 Salaries Expense LIABILITIES 532 Bad Debt Expense 211 Accounts Payable 540 Interest Expense 231 Salaries Payable 541 Depreciation Expense 250 Unearned Revenue 559 Miscellaneous Expenses counts 250 Unearned Revenue 559 Miscellaneous Expenses 255 Bonds Payable 910 Income Tax Expense 256 Premium on Bonds Payable 261 Income Taxes Payable EQUITY 311 Common Stock 315 Additional Paid-In Capital 331 Retained Earnings General Journal Instructions Prepare the joumal entry to record the exercise of the conversion option, using the book value method on January 1,2020. General Joumal General Joumal Instructions