The Martino Inc issued 10 years, $4,000,000 par, 7% callable conversion subordinated debentures on 1 January 2017. The bonds have a par value of $1,000, with interest payable annually. The interest expense recorded on the liability component of the convertible bond for 2015 was $220,000. The current conversion ratio 16:1. At the date of issue, the bonds were sold at 98. Tax rate 30%. Net income in 2017 was $7,400,000, and the company had 2,000,000 shares outstanding during the entire year