Part 1. On July 1,2009, Teller Company exercises a $4,000 call option ( plus par value) on its outstanding bonds that have a carrying value of $208,000 and par value of $200,000. The Company exercise the call option after the semiannual interest is paid on June 30, 2009.
Part 2. On January 1, 2009, the $1,000,000 par value bonds of Staten Company with a carrying value of $1,000,000 are converted to 500,000 shares of $1.00 par value common stock.