Problem #6: Bond Conversion Journal Entry (Partial Conversion of Bonds)

Coffee Brew Company has the following bond outstanding:

$5,500,000 of 9% convertible bonds outstanding, each $1,000 bond is convertible into 25 shares of $32 par value common stock. The total unamortized bond premium at the date of conversion was $350,000.

On July 31, 2019, the holders of $1,650,000 bonds exercised the conversion privilege. On that date the market price of the bonds was 103 and the market price of the common stock was $35. The bonds pay interest on January 31 and July 31.

Required: Record the journal entry for the conversion: