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  3. telta inc. issued $15,000,000 of 12%,40-year conve

Telta Inc. issued $15,000,000 of 12%,40-year convertible bonds on November 1,2025, at 97 plus accrued...

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Accounting

Telta Inc. issued $15,000,000 of 12%,40-year convertible bonds on November 1,2025, at 97 plus accrued interest. The bonds were
dated July 1,2025, with interest payable January 1 and July 1. Bond discount (premium) is amortized semiannually on a straight-line
basis.
On July 1,2026, one-half of these bonds were converted into 60,000 shares of $1 par value common stock. Accrued interest was paid
in cash at the time of conversion.
(a) Prepare the entry to record the interest expense at December 31,2025. Assume that accrued interest payable was credited
when the bonds were issued. Credit Interest Payable for the full amount due; debit Interest Payable for the amount
recognized at insurance. (Round to nearest dollar.)
(b) Prepare the entry to record the conversion on July 1,2026.(Book value method is used.) Assume that the entry to record
amortization of the bond discount and interest payment has been made.
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