JKD Company reported the following amounts on its balance sheet at July 31, 2021:

Required: 

a. Prepare the journal entry to record the bond interest payment on July 31, 2022. 

b. Calculate the total number of common shares outstanding after the bonds’ conversion on July 31, 2022. 

c. Prepare the journal entry to record the bond conversion.

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Liabilities Convertible bonds payable, $4,000,000 face value, 10%, due July 31, 2022 Equity Contributed surplus common stock conversion rights Preferred shares, no par value, 3,100,000 shares authorized, 20,000 outstanding Common shares, no par value, 1,000,000 shares authorized, 120,000 outstanding Additional information $3,859,649 345,000 2,000,000 6,000,000 1. The bonds pay interest each July 31. Each $1,000 bond is convertible into 15 common shares. The bonds were originally issued to yield 14%. On July 31, 2022, all the bonds were converted after the final interest payment was made. JKD uses the book value method to record bond conversions as recommended under IFRS. 2. No other share or bond transactions occurred during the year.