Pharoah Capital Ltd$.$ issued $\backslash (620\backslash$$ $1,000\backslash )$ bonds at $102.$ After issuance, similar bonds were sold at $96.$ Assume that the instruments are convertible bonds and that they have now been converted. Assume that Pharoah Capital Ltd$.$ follows ASPE and valued the debt component of the instruments first, applying the residual to the equity component. On a date when the bonds had a carrying value of $\backslash (\backslash$$ $602,000\backslash )$ and fair value of $\backslash (\backslash$$ $603,900\backslash ),$ Pharoah Capital paid $\backslash (\backslash$$ $650,000\backslash )$ in cash to the bondholders to retire the bonds early.

Record the retirement using the book value method. $($Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. List all debit entries before credit entries.$)$

Account Titles and Explanation

Debit

Credit