A Company Has $900,000 in Bonds Payable with an Unamortized

question 127

Multiple Choice

A company has $900,000 in bonds payable with an unamortized discount of $21,000. If two-thirds of the bonds are converted to common stock, the carrying value of the bonds payable will decrease by

• A) $293,000.
• B) $586,000.
• C) $614,000.
• D) $628,000.

---

Definitions:

Agent

Someone who is authorized to act on behalf of another person (the principal), especially in business or legal matters.

Apparent Authority

A situation where a person appears to have the authority to act on behalf of another person or company, leading others to rely on that apparent authority.

Durable Power

Refers to a legal document granting someone else the authority to act on your behalf in specific legal and financial matters, even after you become incapacitated.

Uniform Durable Power

A legal document that grants one person (the agent) the authority to act on behalf of another (the principal) in a wide range of matters and remains in effect even if the principal becomes incapacitated.