Sedge Corporation issued $1,000,000 of 10% convertible bonds for $1,040,000 on April 1, 2016. The bonds are dated April 1, 2016, pay interest semiannually on September 30 and March 31, and the premium is amortized using the straight-line method. The bonds are due March 31, 2026, and each $1,000 bond is convertible into 20 shares of Sedge's $10 par common stock. On April 1, 2018, when the shares were selling for $30 per share, $300,000 of the bonds were converted. On October 1, 2020, when the shares were selling for $32 per share, the remainder of the bonds were converted.

Required:

1. Prepare the journal entries to record each bond conversion using the book value method.

2. Prepare the journal entries to record each bond conversion using the market value method.