P16-2 (Entries for Conversion, Amortization, and Interest of Bonds) Volker Inc. issued
$2,500,000	of convertible		10	-year bonds on July 1, 2014. The bonds
provide for	12%	interest payable semiannually on January 1 and July 1. The discount
in connection with the issue was			$54,000	, which is being amortized monthly on a
straight-line basis.
The bonds are convertible after one year into			8	shares of Volker Inc.'s		$100
par value common stock for each			$1,000	of bonds.
On August 1, 2015,		$250,000	of bonds were turned in for conversion into common stock.
Interest has been accrued monthly and paid as due. At the time of conversion any accrued interest on bonds being converted is paid in cash.
							Note: Due to rounding and significant digits, there may be slight number differences.
Instructions:
Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates: (Round to the nearest dollar.)
							(a) August 1, 2015. (Assume the book value method is used.)
Aug 1, 15	Account Title				Amount
	Account Title					Amount
	Account Title					Amount
	Account Title					Amount
	Enter entry memorandum.
	Area for calculations as desired.
	Area for calculations as desired.
Aug 1, 15	Account Title				Amount
	Account Title					Amount
	Enter entry memorandum.
(b) August 31, 2015.
Aug 31, 15	Account title				Formula
	Account title					Amount
	Enter entry memorandum.
	Area for calculations as desired.
Aug 31, 15	Account Title				22,500
	Account Title					Amount
	Enter entry memorandum.
(c) December 31, 2015, including closing entries for end-of-year.
Dec 31, 15	Account Title				Amount
	Account Title					Amount
	Enter entry memorandum.
Schedule 1 - Monthly Amortization Schedule
Unamortized discount on bonds payable:
Amount to be amortized over 120 months					Amount
Text title					Formula
Text title					Formula
Text title					Formula
Text title					Formula
Text title					Formula
Text title					Formula
Schedule 2 Interest Expense Schedule
Amortization of bond discount charged to bond interest expense in 2015 would be as follows:
	Text title				Formula
	Text title				Formula
	Total				Formula
Interest on Bonds:
Text title					Formula
Text title					Formula
Text title					Formula
Text title					Formula
Interest for 2015 would be as follows:
Text title					Formula
Text title					Formula
Total					Formula
Total interest
Text title					Formula
Text title					Formula
Text title					Formula