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Greenwood Company sold $4,000,000 of 7% first-mortgage bonds on October 1, 2007 at $3,479,683 plus accrued interest. The bonds were dated July 1, 2007; interest payable semiannually on Jan 1 and July 1; redeemable after Jue 30,2012 to June 30, 2015, at 101, and thereafter until maturity at 100; and convertible into $1 par value common stock as follows:

- until june 30, 2012 at the rate of five shares for each $1,000 bond

- from July 1, 2012, to June 30, 2015 at the rate of four shares for each $1,000 bond

-After June 30, 2015, at the rate of three shares for each $1,000 bond

The bonds mature 10 years from their issue date. The company adjusts its books monthly and closes its books as of December 31 of each year. The following transactions occur in connection with the bonds

2013 July 1: Converted $1,500,000 of bonds inot stock with no gain or loss recognized

2014 Dec. 31: Reacquired $1,000,000 face value bonds at 99.75 plus accrued interst. These were immeidately retired.

2015 July 1: Called the remaining bonds for redemptions and paid accrued interest. For purposes of obtaining funds for redemption and business expansion, a $3,000,000 issue of 9% bonds was sold at 97. these bonds were dated july 1, 2015 and are due in 20 years.

Instructions:

Prepare journal entries necessary for Greenwood company in connection with the preceeding transactions, including montly adjustments, where appropriate, as of the following dates. Assume bond discount amortization is made using the straight line method (note: Round to the nearest whole dollar)

1. October 1, 2007

2. December 31, 2007

3. July 1, 2013

4. December 31, 2014

5. July 1, 2015

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