I asked this question already and thought I understood what the tutor said but the module is saying it's wrong. I figured out a little on my own but the rest is Greek to me! For the first part, how do i figure out the premium on bond payable? and Bond payable?

for the second part, how do i figure out the 'premium on bond payable' 'common stock' and 'additional paid in capital?'

On January 1, 2015, when its $30 par value common stock was selling for $70 per share, a corporation issued $20 million of 12% convertible debentures due in 10 years. The conversion option allowed the holder of each $1,000 bond to convert it into six shares of the corporation's $30 par value common stock. The debentures were issued for $21 million. At the time of issuance, the present value of the bond payments was $18.50 million, and the corporation believes the difference between the present value and the amount paid is attributable to the conversion feature. On January 1, 2016, the corporation's $30 par value common stock was split 3 for 1. On January 1, 2017, when the corporation's $10 par value common stock was selling for $80 per share, holders of 40% of the convertible debentures exercised their conversion options. The corporation uses the straight-line method for amortizing any bond discounts or premiums.

Required:

1. Prepare the journal entry to record the original issuance of the convertible debentures.
2. Prepare the journal entry to record the exercise of the conversion option, using the book value method.

Prepare the journal entry to record the original issuance of the convertible debentures on January 1, 2015. PAGE 1 GENERAL JOURNAL Score: 32/37 DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Jan. 1 Cash 21,000,000.00 7 Premium on Bonds Payable 4,000,000.00 3 Bonds Payable 2,500,000.00 Prepare the journal entry to record the exercise of the conversion option, using the book value method on January 1, 2017. PAGE 1 GENERAL JOURNAL Score: 43/49 DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Jan. 1 Bonds Payable 8,000,000.00 Premium on Bonds Payable 1,000,000.00 Common Stock 8,000,000.00 Additional Paid-In Capital 8,000,000.00