Question: Hammermill Co . has $ 5 , 0 0 0 , 0 0 0 of 8 % convertible bonds outstanding. Each $ 1 , 0

Hammermill Co. has $5,000,000 of 8% convertible bonds outstanding. Each $1,000 bond is convertible into 30 shares of $30 par value common stock. The bonds pay interest on January 31 and July 31. On July 31,2012, the holders of $1,600,000 bonds exercised the conversion privilege. On that date the market price of the bonds was 105 and the market price of the common stock was $36. The total unamortized bond premium at the date of conversion was $350,000.
Required: Record the journal entry for the conversion

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