On January 1, 20X1, Kate Products issued five-year convertible bonds of $400,000. Interest is payable semi-annually on June 30 and December 31 at a rate of 10%. The effective yield is 6%. Each $1,000 bond can be convertible into six shares of Kate Products' ordinary shares starting from January 1, 20X3. Assume without the convertible option, investors would demand a yield of 8%. On Jan 1, 20X4, the bondholders convert 80% of the bond into common shares, and the remaining 20% were never exercised till maturity. Following the with-and-without method, prepare journal entry for Kate on: 1) on January 1, 20X1 regarding the bond issuance 2) Interests payment for 20X1; 3) Jan 1,20X4 for the 80% of the conversion; 4) Interest payment for the year 20X4; 5) Dec 31,205 for the expiry of the bond and repayment of the bond. 2. The Perry National Bank has a note receivable of $30,000,000 from the Mogren Company that it is carrying at face value and is due on December 31, 20X3. Interest on the note is payable at 8% each December 31 . The last interest Mogren Company paid was on December 31, 20X1 and Mogren has financial difficulty in meeting the payment obligations. On January 1, 20X3, the company asked the bank to modify the terms of the note because of its financial difficulties. After negotiation the bank agreed to: 1) Forgive the interest accrued for the year 202. 2) Reduce the stated interest rate to 6%. 3) Reduce the unpaid principal amount to $22 million and to be repaid at the end of 20X4. 4) Assume the effective interest rate for Mogren Company at the time of the restructuring remains at 10%. Required: Prepare the journal entries by Mogren Company necessitated by the restructuring of the debt on January 1, 20X3, Dec 31, 20X3, and December 31, 20X4