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

question 115

Multiple Choice

XYZ 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. 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 debit to bonds payable of:

• A) $38,400.
• B) $15,000.
• C) $30,000.
• D) $23,400.