On January 1, 2018, Gless Textiles issued $19 million of 8%,10-year convertible bonds at...

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On January 1, 2018, Gless Textiles issued $19 million of 8%,10-year convertible bonds at 101. The bonds pay interest on June 30and December 31. Each $1,000 bond is convertible into 40 shares ofGless’s no par common stock. Bonds that are similar in allrespects, except that they are nonconvertible, currently areselling at 99 (that is, 99% of face amount). Century Servicespurchased 15% of the issue as an investment.
Required: 1. Prepare the journal entries for the issuance of thebonds by Gless and the purchase of the bond investment byCentury.
2. Prepare the journal entries for the June 30, 2022, interestpayment by both Gless and Century assuming both use thestraight-line method.
3. On July 1, 2023, when Gless’s common stock had a market priceof $33 per share, Century converted the bonds it held. Prepare thejournal entries by both Gless and Century for the conversion of thebonds (book value method).

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In: AccountingOn January 1, 2018, Gless Textiles issued $19 million of 8%,10-year convertible bonds at 101....On January 1, 2018, Gless Textiles issued $19 million of 8%,10-year convertible bonds at 101. The bonds pay interest on June 30and December 31. Each $1,000 bond is convertible into 40 shares ofGless’s no par common stock. Bonds that are similar in allrespects, except that they are nonconvertible, currently areselling at 99 (that is, 99% of face amount). Century Servicespurchased 15% of the issue as an investment.Required: 1. Prepare the journal entries for the issuance of thebonds by Gless and the purchase of the bond investment byCentury.2. Prepare the journal entries for the June 30, 2022, interestpayment by both Gless and Century assuming both use thestraight-line method.3. On July 1, 2023, when Gless’s common stock had a market priceof $33 per share, Century converted the bonds it held. Prepare thejournal entries by both Gless and Century for the conversion of thebonds (book value method).