Sunland Inc. issued $$3,840,000$ of $10\%,10-$year convertible bonds on June $1,2025,$ at $98$ plus accrued interest. The bonds were dated

April $1,2025,$ with interest payable April $1$ and October $1.$ Bond discount is amortized semiannually on a straight$-$line basis.

On April $1,2026,$ $$1,440,000$ of these bonds were converted into $24,000$ shares of $$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 $1,2025.$ Assume that accrued interest payable was credited

when the bonds were issued.

$($b$)$ Prepare the entry to record the conversion on April $1,2026.($Book value method is used.$)$ Assume that the entry to record

amortization of the bond discount and interest payment has been made.

$($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. Round answers to $0$ decimal places, e$.$g$.5,125.)$

No$.$ Account Titles and Explanation

Debit

$($a$)$

Interest Payable

Interest Expense

Discount on Bonds Payable

$($b$)$

Bonds Payable

Discount on Bonds Payable

Paid$-$in Capital in Excess of Par $-$ Common Stock

Credit

$$