If sixty $1000 convertible bonds with a carrying value of $70000 are converted into 9000 shares of $5 par value common stock the journal entry to record the conversion is a. Bonds Payable 70 , 000 Common Stock 70 , 000 \begin{array}{llr} ext { Bonds Payable } & 70,000\ ext { Common Stock } & & 70,000\\end{array} Bonds Payable Common Stock 70 , 000 70 , 000 b. Bonds Payable 60 , 000 Premium on Bonds Payable 10 , 000 Common Stock 70 , 000 \begin{array}{llr} ext { Bonds Payable } & 60,000\ ext { Premium on Bonds Payable } & 10,000\ ext {Common Stock } & & 70,000\end{array} Bonds Payable Premium on Bonds Payable Common Stock 60 , 000 10 , 000 70 , 000 c. Bonds Payable 60 , 000 Premium on Bonds Payable 10 , 000 Common Stock 45 , 000 Paid-in Capital in Excess of Par 25 , 000 \begin{array}{llr} ext { Bonds Payable} & 60,000\ ext { Premium on Bonds Payable } & 10,000\ ext { Common Stock } & & 45,000\ ext { Paid-in Capital in Excess of Par } & & 25,000\end{array} Bonds Payable Premium on Bonds Payable Common Stock Paid-in Capital in Excess of Par 60 , 000 10 , 000 45 , 000 25 , 000 d. Bonds Payable 70 , 000 Discount on Bonds Payable 10 , 000 Common Stock 45 , 000 Paid-in Capital in Excess of Par 15 , 000 \begin{array}{llr} ext { Bonds Payable } & 70,000\ ext { Discount on Bonds Payable} & & 10,000\ ext { Common Stock } & & 45,000\ ext { Paid-in Capital in Excess of Par} & & 15,000\end{array} Bonds Payable Discount on Bonds Payable Common Stock Paid-in Capital in Excess of Par 70 , 000 10 , 000 45 , 000 15 , 000

Question

If sixty $1000 convertible bonds with a carrying value of $70000 are converted into 9000 shares of $5 par value common stock the journal entry to record the conversion is a.  Bonds Payable  70 , 000  Common Stock  70 , 000 \begin{array}{llr}  	ext { Bonds Payable }  & 70,000\ 	ext { Common Stock }  & & 70,000\\end{array}  Bonds Payable   Common Stock  ​ 70 , 000 ​ 70 , 000 ​ b.  Bonds Payable  60 , 000  Premium on Bonds Payable  10 , 000 Common Stock  70 , 000 \begin{array}{llr}  	ext { Bonds Payable }  & 60,000\ 	ext { Premium on Bonds Payable }  & 10,000\ 	ext {Common Stock  }  & & 70,000\end{array}  Bonds Payable   Premium on Bonds Payable  Common Stock  ​ 60 , 000 10 , 000 ​ 70 , 000 ​ c.  Bonds Payable 60 , 000  Premium on Bonds Payable  10 , 000  Common Stock  45 , 000  Paid-in Capital in Excess of Par  25 , 000 \begin{array}{llr}  	ext {  Bonds Payable}  & 60,000\ 	ext { Premium on Bonds Payable }  & 10,000\ 	ext { Common Stock }  & & 45,000\ 	ext { Paid-in Capital in Excess of Par }  & & 25,000\end{array}  Bonds Payable  Premium on Bonds Payable   Common Stock   Paid-in Capital in Excess of Par  ​ 60 , 000 10 , 000 ​ 45 , 000 25 , 000 ​ d.  Bonds Payable  70 , 000  Discount on Bonds Payable 10 , 000  Common Stock  45 , 000  Paid-in Capital in Excess of Par 15 , 000 \begin{array}{llr}  	ext { Bonds Payable }  & 70,000\ 	ext { Discount on Bonds Payable}  & & 10,000\ 	ext { Common Stock }  & & 45,000\ 	ext {  Paid-in Capital in Excess of Par}  & & 15,000\end{array}  Bonds Payable   Discount on Bonds Payable  Common Stock   Paid-in Capital in Excess of Par ​ 70 , 000 ​ 10 , 000 45 , 000 15 , 000 ​

Stephan Besel · Accepted Answer

Final Answer : C

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