Sharidan Ine. issued $$2,160,000$ of comertible $10$ year bonds on July $1,2025.$ The bonds provide for $1196$ intersst payable

semiannually on January $1$ and July $1.$ The discount in connection with the issue was $$49,000,$ which is being amortized monthly an a

straight$-$line basis.

The bonds are corwertible aftar one year into $8$ shares of Sharidan Inc's $$100$ par value common stock for each $$1,000$ of bonds.

On Au$$ust $1,2026,$ $$216,000$ of bonds ware turned in for convarsion into common stock. Interset has besen accruad monthly and paid

as due. At the time of conversion, any accrued interest on bonds being converted is paid in cash.

Prspare the journal entries to record the convarsion, amortization, and intersest in connaction with the bonds as of the following dates.

$($List all debit entries before credit entries. Credit account titles are autamatically 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.

a$.$ Au$$ust $1,2026.[$Assume the bookvalue method is used.$]$

b$.$ Au$$ust $31,2026.$

c$.$ December $31,2026,$ including elosing entries for end$-$of$-$yaar.

No$.$ Date Account Titles and Explanation

Debit

Credit

Aus

a$.1,$

$2026$

$($To record the issuance of shares of common stock and

the write$-$ort of the discount on bonds peyable.$)$

ALz

$2026$

$($To record payment in cash of interest accrued on

bonds.$)$

Auz

b$.31,$

$2026$

$($To record amortization of discourt on bonds.$)$

ALz

$31,$

$2026$

$($To recierd accrual of interest on bonds.$)$

Dec

c$.31,$

$2026$

$($To close expense account$)$