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Exercise 16-2 Your answer is partially correct. Try again Buffalo Inc. issued $3,670,000 of 10%, 10-year convertible bonds on June 1, 2017, at 98 plus accrued interest. The bonds were dated April 1, 2017, with interest payable April 1 and October 1, Bond discount is amortized semiannually on a straight-line basis. On April 1, 2018, $1,376,250 of these bonds were converted into 36,000 shares of s20 par value common stock. Accrued interest was paid in cash at the time of conversion. (a) Prepare the entry to record the interest expense at October 1, 2017. Assume that accrued interest payable was credited when the bonds were issued (b) Prepare the entry to record the conversion on April 1, 2018. (Book value method is used.) Assume that the entry to record amortization of the bond discount and interest payment has been made. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to O decimal places, e.g. 5,125.) No. Account Titles and Explanation Debit Credit (a) interest Payable 124821 Interest Expense 61167 Discount on Bonds Payable 248 Cash 18350 (b) Bonds Payable 1376250 Discount on Bonds Payable 2332 Common Stock 792000 Paid-in Capital in Excess of Par - Common Stock 581918 Click if you would like to Show Work for this question: Open Show Work

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