Valley Company has $80,000, 10%, 12-year convertible bonds outstanding. These bonds were sold at face value and pay annual interest on December 31 of each year. The bonds are convertible into 40 shares of Valley $4 par value common stock for each $1,000 par value bond. On December 31, 2017, after the bond interest has been paid, $30,000 par value of bonds were converted. The market value of Valley’s common stock was $38 per share on December 31, 2017.

Required – 

For each of the independent situations, prepare the journal entry to record the retirement or conversion of the bonds.