When Bonds Are Converted into Common Stock

question 130

Multiple Choice

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.

---

Definitions:

NDP

The total value of all goods and services produced within a country's borders in a specific time period, minus depreciation.

GDP

Gross Domestic Product, the total value of all goods and services produced over a specific time period within a country's borders, serving as a comprehensive measure of economic activity.

Output

The total amount of goods or services produced by a company, industry, or economy within a certain period.

Base Year Prices

Prices of goods and services in a specific year that are used as a standard comparison point for economic analysis over different periods.