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:

Minimum Cash Balance

The lowest amount of cash that a company or individual aims to hold in order to meet operational and transaction needs.

Net Operating Income

The profit generated from a business's core operations, excluding expenses and revenues from non-operating activities.

Estimated

Refers to approximate calculations or judgments about figures or values that are not precisely known.

Finished Goods Inventory

Inventory that consists of items that have completed the manufacturing process but have not yet been sold to customers.