Tasis Ventures Inc. is authorized to issue 10-year, 5 percent convertible bonds with a maturity value of $9,000,000. Interest is payable on June 30 and December 31. The bonds are convertible on the basis of 40 common shares for each $1,000 bond. The following bond transactions took place:

2017

Jan. 2 Issued bonds with $5,400,000 maturity value. Since the market rate of interest on this date was 4 percent, the bonds sold for $5,841,488.

Jun. 30 Paid semi-annual interest and amortized the premium using the effective interest method.

Dec. 31 Paid semi-annual interest and amortized the premium using the effective interest method.

2018

Jun. 30 Paid semi-annual interest and amortized the premium using the effective interest method.

Jul. 2 Retired bonds with a $600,000 maturity value at a rate of 101.

2 Bondholders converted bonds with a $600,000 maturity value into common shares.

Required

1. Create an amortization schedule for the first three interest periods for the bonds sold on January 2, 2017. Round all amounts to the nearest whole dollar. Use the values from the schedule and any other information to journalize all the transactions above.

2. Show the balance sheet presentation of the bonds payable on July 2, 2018.