An examination of the accounting records of Durham Corporation on January $1,2019($after reversing entries had been made for all accrued interest at the end of $2018)$ disclosed the following information regarding the company$’$s long$-$term debt:

Durham Corporation

Long$-$Term Debt

December $31,2018$

$1$

$12\mathrm{.}5\%$ bonds, dated January $1,2015,$ paying interest semiannually on June $30$ and December $31,$ and due December $31,2021$

$$1,300,000\mathrm{.}00$

$2$

$11\%$ convertible bonds, dated April $1,2017,$ paying interest semiannually on March $31$ and September $30,$ and due March $31,2022$

$$500,000\mathrm{.}00$

$3$

Discount on convertible bonds payable

$(17,500\mathrm{.}00)$

$4$



$$482,500\mathrm{.}00$

$5$

$9\%$ bonds, dated March $1,2018,$ paying interest annually on February $28,$ and due February $28,2023$

$$100,000\mathrm{.}00$

$6$

Discount on bonds payable

$(3,960\mathrm{.}00)$

$7$



$$96,040\mathrm{.}00$

$8$

$4-$year, non$-$interest$-$bearing note issued January $1,2018($Durham$’$s incremental borrowing rate on the date the note was issued was $10\%.)$

$$80,000\mathrm{.}00$

$9$

Discount on note payable

$(19,895\mathrm{.}00)$

$10$



$$60,105\mathrm{.}00$

Additional information disclosed in the notes to Durham$’$s $2018$ financial statements:

$1.$ The conversion option allows the holder of each $$1,000$ bond to exchange it for $30$ shares of $$10$ par common stock. Durham uses the book value method to record conversions of bonds to common stock.

$2.$ Each $$1,000$ bond of the $9\%$ bonds dated March $1,2018,$ carries $15$ detachable warrants. The company had recorded the $1,500$ warrants on the bonds at $$4,800$ in a Common Stock Warrants account. The exchange of three warrants allows the holder to acquire one share of $$10$ par common stock for $$27.$

$3.$ The discount on the convertible bonds and the discount on the $9\%$ bonds with detachable warrants are being amortized using the straight$-$line method.

$4.$ The discount on the note payable is being amortized annually using the effective interest method.

During $2019,$ Durham engaged in the following long$-$term debt transactions:

Jan. $1$ Issued $11\%,$ $$800,000$ face value bonds for $$820,302,$ a price to yield $10\%.$ Interest on these bonds is payable semiannually on June $30$ and December $31,$ and they are due December $31,2021.$ The effective interest method is to be used to amortize the premium. The bonds are callable at $107.$

May $1600$ warrants from the $9\%$ bonds were exercised when the common stock was selling for $$42$ per share.

Sept. $30$ Convertible bonds of $$100,000$ were exchanged when the common stock was selling for $$45$ per share.

Nov. $1$ Retired $$200,000$ of the bonds issued on January $1,2019,$ at the call price plus accrued interest.

Required:

$1.$ Prepare the journal entries for Durham to record all the transactions that occurred during $2019$ relating to the preceding information.

$2.$ Prepare the long$-$term debt section of Durham$’$s balance sheet on December $31,2019.$