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  3. the ad mitchell company issued 8 year bonds on jan

the ad mitchell company issued 8 year bonds on january 1,2001. the debt has a...

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Accounting

the ad mitchell company issued 8 year bonds on january 1,2001. the debt has a face value of $100,000(the face value of each bond is $1000), and an annual stated interest rate of 6%. interest payments are due semiannually beginning june 30,2001. the market interest rate on the bond is 8%. mitchell company uses the straight-line amortization method to account for any discount or premium on the bond. the holder of the bonds has the option of converting each $1,000 bond into 15 shares of mitchell company common stock (par value $2). on the day the bonds are sold, the mitchell company common stock is selling for $52 per share.
on february 1,2002, $30,000(face value) of bonds are converted into shares of mitchell company common stock. on that day, each share of mitchell company common stock was trading fr o$72. what journal entries would mitchell company record on this day assuming it uses fair market balue method to account for the bond conversion?

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