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In: AccountingOn January 1, 2015, when its $30 par value common stock wasselling for $60 per...On January 1, 2015, when its $30 par value common stock wasselling for $60 per share, a corporation issued $20 million of 12%convertible debentures due in 10 years. The conversion optionallowed the holder of each $1,000 bond to convert it into sixshares of the corporation’s $30 par value common stock. Thedebentures were issued for $21 million. At the time of issuance,the present value of the bond payments was $18.50 million, and thecorporation believes the difference between the present value andthe amount paid is attributable to the conversion feature. OnJanuary 1, 2016, the corporation’s $30 par value common stock wassplit 3 for 1. On January 1, 2017, when the corporation’s $10 parvalue common stock was selling for $70 per share, holders of 40% ofthe convertible debentures exercised their conversion options. Thecorporation uses the straight-line method for amortizing any bonddiscounts or premiums. Required: 1. Prepare the journal entry torecord the original issuance of the convertible debentures. 2.Prepare the journal entry to record the exercise of the conversionoption, using the book value method.