If Bonds with a Face Value of $200,000 Are Converted

question 182

Multiple Choice

If bonds with a face value of $200,000 are converted into common stock when the carrying value of the bonds is $155,000,the entry to record the conversion would include a debit to:

• A)Bonds Payable for $155,000.
• B)Bonds Payable for $200,000.
• C)Discount on Bonds Payable for $45,000.
• D)Cash for $45,000.

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Definitions:

Industry Concentration

A measure of the extent to which a small number of firms dominate the total production, sales, or market share in an industry.

Elastic

A measure in economics indicating how much the demand or supply of a good changes in response to a change in price.

Marginal Revenue

The extra revenue gained by selling an additional unit of a product or service.