Stonewall Corporation issued $20,000 of 5%, 10-year convertible bonds. Each $1,000 bond is convertible to 10

shares of common stock (par $50) of Stonewall Corporation. The bonds were sold at 105 on January 1, 2020.

Required

a. Provide the entry for Stonewall Corporation on January 1, 2020, for the bond issuance.

b. Provide entries for Stonewall Corporation assuming that the conversion privilege is subsequently exercised

immediately after the end of the third year. Assume that at the date of conversion, 30% of any premium or dis-

count has been amortized and the common stock was selling at $125 per share. Use the book value method.

I need the work for the 12/31/20 adjusting entry for the $20,000 bonds still outstanding