On January 1, 20X1, when its $30 par value common stock was selling for $80 per share, Gierach Corporation issued $10 million of 49 convertible debentures due in 10 years. The conversion option allowed the holder of each $1,000 bond to convert the bond into five shares of the company's $30 par value common stock. Cash settlement upon conversion is not permitted. The debentures were issued for $10 million. Without the conversion feature, the bonds would have been issued for $8.5 million. On January 1, 20X3, the company's $30 par value common stock was split three for one. On January 1, 20X4, when the company's $10 par value common stock was selling for $90 per share, holders of 40% of the convertible debentures exercised their conversion options. Required: 1. Following U.S. GAAP, prepare a journal entry to record the original issuance of the convertible debentures. 2. How much interest expense would the company recognize on the convertible debentures in 20X1? 3. Prepare a journal entry to record the exercise of the conversion option using the book value method. 4. Prepare the entry to record the exercise of the conversion option using the market-value method. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 and 4 How much interest expense would the company recognize on the convertible debentures in 20X1? (Enter your answers in whole dollars rather than in millions.) Interest expense