Thirty $1,000 Bonds with a Carrying Value of $39,600 Are

question 2

Multiple Choice

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 39,600 Common Stock 20,000
• Paid-in Capital in Excess of Par 19,600
• B) Bonds Payable 30,000 Premium on Bonds Payable 9,600
• Common Stock 30,000
• Paid-in Capital in Excess of Par 3,600
• C) Bonds Payable 30,000 Premium on Bonds Payable 9,600
• Common Stock 20,000
• Paid-in Capital in Excess of Par 19,600
• D) Bonds Payable 39,600 Common Stock 36,000
• Paid-in Capital in Excess of Par 3,600

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