Prepare the necessary journal entry for the bond conversion

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Question - In 2015, The Platinum Company issued $700,000 8% bonds with 700 nondetachable warrants for $765,000 cash. Each warrant entitled the holder to buy 100 shares of The Platinum Company's $2 par common stock at $20 per share and required surrender of the attached $1,000 bond. On March 2, 2021, all The Platinum Company bondholders exercised their warrants for new shares and forfeited the bonds when shares were trading at $40 per share. On March 2, 2021, the unamortized premium on the bonds was $25,000.

Required - Prepare the necessary journal entry for the bond conversion on March 2, 2021 Assume that the Platinum Company uses the market method to record the stock issuances.

Reference no: EM133171202

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