Question 1 On January 1 2016 when its $ 30 par value common stock was selling for S 80 per share Stellar Corp. issue S 10.900,000 of 8% con er ble de e tures due 20 years e com ers on tion allowed e holder feac , 1,000 bond to convert the bond into five shares of the corporation's common stock. The debentures were issued for $11,772,000, The present value of the bond payments at the time of issuance was $9,265,000, and the corporation believes the difference between he present value and the amount pad is attributable o he conversion eature n January 1 the corporation s $ par val e common stock as and the m ersion rate or the bonds was adjusted according y. On January 1 2018, when he corporations $ 15 par value common stock was selling or $ 13 pers are, holders of 30% of the conver ible de en exercise the conversion options. The corporation uses the straight-line method for amortizing any bond discounts or premiums. (a) Prepare the entry to record the original issuance of the convertible debentures. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit (b) Prepare the entry to record the exercise of the conversion option, using the book value method. (Credit account titles are automatically indented when amount is entered. Do not Indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit