When bonds are converted into common stock

A) the market price of the stock on the date of conversion is credited to the Common Stock account.
B) the market price of the bonds on the date of conversion is credited to the Common Stock account.
C) the market price of the stock and the bonds is ignored when recording the conversion.
D) gains or losses on the conversion are recognized.

Market Price

The prevailing market rate at which one can purchase or sell an asset or service.

Common Stock

Equity investments that represent ownership in a company and typically grant voting rights to shareholders.

Conversion

The process of changing or converting resources into finished goods or services, often used in accounting and manufacturing to describe the transformation of raw materials into products.