Problem Four

Oldford Inc's December $31,2011$ adjusted trial balance showed the following:

Bonds Payable, convertible. $$2,500,000$

Premium on Bonds Payable $33,000$

Required:

a$)$ What is the carrying value of the bonds on December $31,2011?$

b$)$ The bonds were converted into $200,000$ common shares on January $1,2012.$ Journalize the entry assuming the market value per common share on this date was $$13\mathrm{.}20.$