• There was a bond issue with a par value of $300,000 (Bond #1) on July 1, 2019 when the market rate of interest was 8%. The bonds have a coupon rate of 7.5% and interest is paid semiannually on January 1 and July 1. The bonds have an eight-year life when issued. This bond issue is convertible into common stock at the rate of 15 shares for every $1,000 of face value (note - common stock has a par value of $2 per share). On January 2, 2023, $60,000 of face value was converted into common stock. The company uses the book value method to record conversions. The market price of the stock was $100 per share when the bonds were converted.

Required:

1. For Bond #1:

1. Compute the bond price.
2. Prepare an amortization table for the life of the bond.
3. Prepare all required journal entries for 2019 and 2020.
4. Record the bond conversion on January 2, 2023.
5. Prepare a new amortization table effective after the bond conversion.
6. Prepare a journal entry for the interest payment on July 1, 2023