Volker Inc. issued $2,500,000 of convertible 10-year bonds on July 1, 2020. The bonds provide for 12% interest payable semiannually on January 1 and July 1 and Volker uses effective interest amortization. On the date of issuance, the market rate of interest was 16%. The bonds are convertible after one year into 8 shares of Volker Inc.'s $10 par value common stock for each $1,000 of bonds.

On Jan 1, 2022, $250,000 of bonds were turned in for conversion into common stock.

1. Prepare the journal entry for the original issuance

2. Prepare an amortization schedule through 1/1/22

3. Prepare the journal entry for the conversion on 1/1/22.