Marshall Corporation Has $30,000 of Bonds Outstanding with a Carrying

question 135

Multiple Choice

Marshall Corporation has $30,000 of bonds outstanding with a carrying value of $38,400.The bonds are converted into 15,000 shares of $1 par value common stock immediately after the last interest payment.The common stock had a market value of $5 per share on the date of conversion.The entry to record the conversion would include a credit to:

• A)Common Stock for $15,000 and credit to Paid-in Capital in Excess of Par for $8,400.
• B)Bonds Payable for $30,000 and credit to Premium on Bonds Payable for $8,400.
• C)Cash for $38,400.
• D)Common Stock for $15,000 and credit to Paid-in Capital in Excess of Par for $23,400.

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Definitions:

Rate of Diffusion

Rate of Diffusion refers to how quickly molecules spread from areas of high concentration to areas of low concentration, influenced by temperature, pressure, and the medium.

Viscosity

A measure of a fluid's resistance to flow, indicating its thickness or thinness.

Temperature

A physical quantity expressing the subjective perceptions of hot and cold, measured in degrees according to various scales (e.g., Celsius, Fahrenheit).

Hypotonic Sweat

Sweat that contains a lower concentration of solutes (mainly salt) than the surrounding tissues, often resulting from acclimatization to hot conditions.