Prudent Corporation has a balance of $600,000 in the Bonds Payable account.

The related unamortized bond discount balance was $ 20,000. Prudent Corporation, in agreement with the bondholders decide to convert $400,000 worth of bonds into common stock of $3 each. The convertible provision stipulates that 50 shares of common stock will be issued for each bond held.

Required: Show necessary journal entries to record the above transaction.