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wy Company issued $500,000, 8% bonds on January 1, Year 1. The bonds pay interest...

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Accounting

wy Company issued $500,000, 8% bonds on January 1, Year 1. The bonds pay interest on June 30 and December 31 and mature on December 31, Year 10. The bonds were issued to yield 6%. Each $1,000 bond was convertible into 50 shares of wy Companys no-par common stock. On January 1, Year 4, when the common stock was trading for $12 per share, one-half of the bonds were converted. wy Company uses the effective interest method to account for bond discounts and premiums.

The entry to record the conversion of the bonds on January 1, Year 4 would include

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