Surland inc, issued $$2,520,000$ of comvertible $10-$year bonds on July $1\mathrm{.}2025.$ The bonds provide for $12\%$ interest payable vemi uneunlly on lamury $1$ and lulk $1.$ The discount in connection with the issue was $$52\mathrm{.}800,$ which is being amortized monthly on a straight$-$line basls.

The bonds are convertible after one year into $9$ shares of Sunland linci's $$100$ par value common stock for each $$1,000$ of bonds.

On hugust $1,2026,$ $$252000$ of bonds wtre turned ia for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of corversion, any accrued interest on bonds being converted is paid in carh.

Prepare the journal entries to record the comersion, amortieation, and interest in connection with the bonds as of the following dates $($List all debit enbries before credit entries. Credit account pities are outomatically indended when amount is entered. De not indent manually. If no entry is required, splect $"$No Entry" for the account titles and enter O for the amounts$)$

a$.$ August $1,2026.($Aswume the book value method is used$)$

b$.$ Autust $31\mathrm{.}202$ A

c$.$ December $31\mathrm{.}2026,$ including closing entries for end$-$of$-$year.

No$.$

Date

Account Titles and Explanation

Debit

Credit

a$.$ Aut $1.q,$

$$

$$

Commonstack $$

$$

Puid in Captal in Leceus of Par$-$Common Sinack

$$

$$

$($T$)$ recond the lssuance of shares of common stock and the wrbe$-$off of the dircourt on bonds parable.$)$

Ang $1.$

$2026$

$$

$$

$$

$($To record peyment in cash of interest acovied on bonds.$)$

$q,$

$$

$$

$$

Auc

b$.31.$

$2008$

$($To recond amortiation of discount on bonds.$)$

Indereu Provith

$(10$ record sccoual of interest on bonds.$)$

c$.$ Dec.

$31.$

$2006$

$$

$$

$($Tlo dove rapeme accounc$)$