On January 1, 2024. Madison Products issued $40 million of 6%. 10-year convertible bonds at a net price of $40.8 million. - Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% 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 borids 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 onverted. Immediately before conversion the net book value of the bonds was $40,600,000. Prepare the journal entry to record the conversion. On June 30,2024, Mabry Corporation issued $15 million of its 8% bonds for $13.8 million. The bonds were priced to yield 10%. The bonds are dated June 30,2024 . Interest is payable semiannually on December 31 and July 1 . If the effective interest method is used, by how much should the bond discount be reduced for the 6 months ended December 31,2024? Enterprise Group issued $100,000 of 3-year, 6% bonds on December 31,2025 , for $106,000. Enterprise uses straight-line amortization. On May 1,2026,$10,000 of the bonds were retired at 110 . As a result of the retirement, Enterprise will report a: a. \$400 loss b. $467 loss c. $1,100 loss d. $1,100 gain Vernois Company purchased a machine from Chunn Corporation on October 31,2024 . In payment for the $576,000 purchase, Vernois issued a one-year installment note to be paid in equal monthly payments of $51,176 at the end of each month. The payments include interest at the rate of 12%. The amount of interest expense that Vernois will report in its income statement for the year ended December 31, 2024, is: a. $5,118 b. $5,760 c. $11,066 d. $11,520 Kazali Industries purchased a machine from Keefe Corporation on October 1,2024 . In payment for the $432,000 purchase, Kazali issued a one-year installment note to be aid in equal monthly payments at the end of each month. The payments include interest at the rate of 12%. Monthly installment payments are: a. $36,000 b. $37,335 c. $38,004 d. $38,383 On January 1, 2024, Madison Products issued \$40 million of 6%, 10-year convertible bonds at a net price of $40.8 million. - Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% 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 borids at face value plus a 1% call premium on July 1, 2026.By June 30 , all bondholders had choten 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. Chism Corporation issued $10 million face amount of bonds on January 1, 2024. The bonds have a 10-year term and pay interest semiannually. The following is a partial bond amortization schedule for the bonds. What is the interest expense on the bonds in 2025? In each subsequent cash payment on an installment note: a. The amount of principal paid decreases b. The amount of principal paid increases c. The amount of interest paid increases d. The amounts paid for both interest ald principal increase proportionately