When a company offers bondholders a sweetener to induce them to convert their bonds to common stock, the cost of this inducement is reflected in the

A) operating expenses section of the income statement
B) other revenue/expense section of the income statement
C) extraordinary items section of the income statement
D) common stock account of the balance sheet

Bondholders

Individuals or entities that hold bonds issued by corporations, municipalities, or governments and are entitled to receive the bond's interest payments plus the return of the bond's principal upon maturity.

Common Stock

A form of corporate equity ownership, a type of security representing ownership in a corporation, with a claim on a portion of its profits.

Operating Expenses

Costs associated with a company's main operational activities, such as rent, utilities, and payroll.