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Sweet Inc. issued $$3,825,000$ of convertible $5-$year bonds on July $1,2025.$ The bonds provide for $6\%$ interest payable semiannually on

January $1$ and July $1.$ The discount in connection with the issue was $$99,000,$ which is being amortized monthly on a straight$-$line basis.

The bonds are convertible after one year into $15$ shares of Sweet Inc.$\text{'}$s $$1$ par value common stock for each $$1,000$ of bonds.

On October $1,2026,$ $$459,000$ 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.

Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates.

$($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 O for the amounts. List all debit entries before credit entries.$)$

$($a$)$ October $1,2026.($Assume the book value method is used.$)$

$($b$)$ October $31,2026$

$($c$)$ December $31,2026,$ including closing entries for end$-$of$-$year.

No$.$ Date

Account Titles and Explanation

Debit

Credit

$($a$)$ Oct. $1,$

Bonds Payable

Discount on Bonds Payable

CommonStock

Paid$-$in Capital in Excess of Par$-$Common Stock

$($b$)$ Oct. $31,$

$($To record amortization of discount on bonds$)$

Oct$\mathrm{.}31,$

$2026$

$($To record amortization of discount on bonds$)$

Dec.

$31,$

$2026$

$($To record accrual of interest payable on bonds$)$

Dec.

$31,$

$2026$

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