Stellar Inc. issued $4,130,000 of 11%, 10-year convertible bonds on June 1, 2020, at 98 plus accrued interest. The bonds were dated April 1, 2020, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis.

On April 1, 2021, $1,548,750 of these bonds were converted into 24,000 shares of $21 par value common stock. Accrued interest was paid in cash at the time of conversion.

(a)		Prepare the entry to record the interest expense at October 1, 2020. Assume that accrued interest payable was credited when the bonds were issued.
(b)		Prepare the entry to record the conversion on April 1, 2021. (Book value method is used.) Assume that the entry to record amortization of the bond discount and interest payment has been made.

No.	Account Titles and Explanation	Debit	Credit
(a)	Interest Payable
	Interest Expense
	Cash
	Discount on Bonds Payable		2800
(b)	Bonds Payable	1548750
	Discount on Bonds Payable
	Common Stock		504000
	Paid-in Capital in Excess of Par - Common Stock