Karen Company showed the following accounts on December 31, 2020. Bonds payable                                                                5,000,000 Premium on bonds payable                                            250,000 Share capital-250,000 shares authorized and 200,000 shares issued, P50par                            10,000,000 Share premium- issuance                                               2,000,000 Share premium- conversion privilage                             500,000  Retained earnings                                                            2,500,000 The bonds are convertible into 10 shares of capital for every P1,000 bond. On December 31, 2020, the entire bond issue was converted and on this date, the market value of the share is 120 and the market value of the bonds is 103. The entity paid P200,000 as a result of the bond conversion. Required: Prepare journal entries for the conversion of the bonds on December 31,2020

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A:

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