The Jan.1, Year 1, balance sheet of Celia Hodes Corp. is as follows:5% (semi-annual coupon rate) callable, convertible bonds payable (semi-annual interest dates of June 30 and December 31; convertible into 6 shares of $25 par value common stock per $1000 bond principal; 500 bonds; maturity date December 31, Year 6) ......$511,237On April 5, Year 2, Celia Hodes Corp. called all of the bonds as of June 30 for the principal plus interest through June 30. By June 30, all bondholders had exercised their conversion to common stock as of the interest payment date. Consequently, on June 30, Celia Hodes Corp. paid the semi-annual interest and issued shares of common stock for the bonds. Celia Hodes Corp. uses effective interest amortization.

REQUIRED: Prepare the entries to record the interest expense and conversion on June 30, Year 2, assuming these bonds contained no cash settlement option for Celia Hodes.