On January 2, 2018, Phi Company sold $600,000 10% 4-year bonds for $562,740 to yield 12%. Interest is payable semi-annually on June 30^th and December 31^st and each bond is convertible into 18 common stock shares ($7 par value.)

Required: (a) Assume 100% of the bonds are converted on July 1, 2019. Prepare the journal entry to record the conversion.

(b) Assume $360,000 of the bonds are converted on July 1, 2019. Prepare the necessary journal entry.