A Bond Issue of $50,000 with a Carrying Value of $49,000

question 147

Multiple Choice

A bond issue of $50,000 with a carrying value of $49,000 is converted into $10 par value common stock at the rate of fifty shares for each $1,000 bond.The entry to record the conversion of bonds would be:

• A) Bonds Payable 50,000
• Loss on Retirement of Bonds 1,000
• Unamortized Bond Discount 1,000
• Common Stock 50,000
• B) Bonds Payable 50,000
• Common Stock 25,000
• Additional Paid-In Capital 25,000
• C) Bonds Payable 50,000
• Common Stock 25,000
• Additional Paid-In Capital 24,000
• Unamortized Bond Discount 1,000
• D) Bonds Payable 49,000
• Unamortized Bond Discount 1,000
• Common Stock 25,000
• Additional Paid-In Capital 25,000

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Definitions:

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