If Convertible Notes Payable Are Converted into Common Stock,the Entry

question 53

Multiple Choice

If convertible notes payable are converted into common stock,the entry to record the conversion would include a debit to:

• A)convertible notes payable.
• B)common stock.
• C)paid-in capital in excess of par.
• D)cash.

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Definitions:

Long-term Debt

Borrowed money that a company or individual must repay over a period longer than one year.

Equipment Trade

The act of exchanging one piece of business equipment for another, often to upgrade or replace assets.

Depreciation Expense

The portion of the cost of a fixed asset deducted as an expense over its useful life, reflecting the asset's consumption or wear and tear.

Common Stock

Shares of ownership in a corporation, granting holders voting rights and a share in the company's profits through dividends.