The Journal Entry to Record the Conversion of Bonds Payable

question 100

Multiple Choice

The journal entry to record the conversion of bonds payable into common stock will include a:

• A)debit to Bonds Payable and a credit to Common Stock.
• B)debit to Bonds Payable and a credit to Cash.
• C)debit to Cash and a credit to Common Stock.
• D)debit to Cash and a credit to Paid-in Capital in Excess of Par.

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Definitions:

Knew-It-All-Along Effect

A cognitive bias where people believe, after an event has occurred, that they predicted or knew the outcome beforehand.

Irrational Treatment

Behavior or actions that lack reason or logical thought, often leading to unfair treatment.

Sunk Costs

Expenses that have already been incurred and cannot be recovered, which should not affect future decision-making but often do.

Faulty Hindsight

The misjudgment of the reasons behind past decisions based on the outcome rather than on the information available at the time.