Sheffiald Inc issued $$2,760,000$ of convartible $10$ year bonds on July $1,2025.$ The bonds provide for $13\%$ intarest payable

semiannually on January $1$ and July $1.$ The discount in connaction with the issue was $$58,900,$ which is being amortizad monthly on a

straight$-$line basis.

The bonds are convartible after one yar into $9$ shares of Sheffiald Inc's $$100$ par value common stock for each $$1,000$ of bonds.

On August $1,2026,$$$276,000$ of bonds wers turnad in for conversion into comman stock. Intarest has bean acorued monthly and paid

as due. At the time of comersion, any accruad interest on bonds being convarted is paid in cash.

Prepare the journal entries to racord the conwersion, amortization, and intersst in connection with the bonds as of the following dates.

$($List all debit entries before credit entries. 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.$)$

a$.$ August $1,2026.($Asaume the boak value mathod is usad.$)$

b$.$ Auzust $31,2026.$

c$.$ Decamber $31,2026,$ including clasing entries for end$-$af$-$year.

No$.$ Date Account Titles and Explanation

Debit

Credit

Auz.

a$.1.$

$2026$

Dlacsunt on Bonds Psyable

Comman Stook

Pald$-$In Capital in Exasa of Par $-$ Comman Stode

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

the write$-$off of the discount on bonds payable.$)$

Aug.

$1,$

$2026$

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

bands.$)$

Auz.

b$.31.$

$2026$

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

Aus.

$31.$

$2026$

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

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

Des.

c $31,$

$2026$

$|$nat$]$