Question 16 (1 point) Thirty $1,000 bonds with a carrying value of $39,600 are c

ID: 2412304 • Letter: Q

Question

Question 16 (1 point) Thirty $1,000 bonds with a carrying value of $39,600 are converted into 4,000 shares of $5 par value common stock. The common stock had a market value of $9 per share on the date of conversion. The entry to record the conversion is a) Bonds Payable 30,000 9,600 Premium on Bonds Payable Common Stock Paid-in Capital in Excess of Par 20,000 19,600 b) Bonds Payable 30,000 9,600 Premium on Bonds Payable Common Stock Paid-in Capital in Excess of Par 30,000 3,600 39.600 d) Bonds Payable

Explanation / Answer

The Answer is “ a “

Journal Entry to record conversion of Bond into Common stock

Accounts Tittles and explanations

Debit ($)

Credit ($)

Bond Payable A/c

30,000

Premium on Bonds Payable A/c

9,600

To Common Stock

20,000

To Paid-in Capital in Excess of Par A/c

19,600

[ Journal Entry to record conversion of Bond into Common stock ]