E$15\mathrm{.}6($LO $1)($Conversion of Bonds$)$ On January $1,2025,$ Gottlieb Corporation issued $$4,020,000$ of $10-$year, $8\%$ convertible debentures at $104.$ Interest is to be paid semiannually on June $30$ and December $31.$ Each $$1,000$ debenture can be converted into eight shares of Gottlieb Corporation $$100$ par value common stock after December $31,2026.$

On January $1,2027,$ $$402,000$ of debentures are converted into common stock, which is then selling at $$110.$ An additional $$400,000$ of debentures are converted on March $31,2027.$ The market price of the common stock is then $$114.$ Accrued interest at March $31$ will be paid on the next interest date.

Bond premium is amortized on a straight$-$line basis.

Instructions

Make the necessary journal entries for:

$1.$ December $31,2026.$

$2.$ January $1,2027.$

$3.$ March $31,2027.$

$4.$ June $30,2027.$

Record the conversions using the book value method.