Problem:
Peters Co had two issues of securities outstanding: common stock and an 8% convertible bond issued in the face amount of $12,000,000. Interest payment dates of the bond issue are June 30 and December 31. The conversion clause in the bond indenture entitles the bondholders to receive forth shares of $20 par value common stock in exchange for each $1,000 bond. On June 30, 2004 the holders of $1,800,000 face value bonds exercised the conversion privilege. The market price of the bonds on that date was $1,100 per bond and the market price of the common stock was $35. The total unamortized bond discount at the date of conversion was $750,000. In applying the book value method, what amount should Peters credit to the account "paid in capital in excess of par," as a result of this conversion?