A Firm Issues Convertible Bonds That Pay 8% Interest and Receives

question 77

Multiple Choice

A firm issues convertible bonds that pay 8% interest and receives $100,000.The firm could have issued nonconvertible bonds that pay 8% interest but would have received only $80,000 in bond proceeds.What journal entry is necessary under GAAP to record the issuance of the convertible bonds?

• A)Cash 100,000 Convertible Bonds Payable 80,000
• Additional Paid-in Capital 20,000
• B)Cash 100,000 Convertible Bonds Payable 80,000
• Convertible Bond income 20,000
• C)Cash 100,000 Convertible Bonds Payable 100,000
• D)Convertible Bonds Payable 100,000 Cash 100,000
• E)No entry is required

---

Definitions:

Distribution Centers

Facilities that handle the storage, processing, and shipping of goods to various destinations, serving as a key node in the supply chain.

Positive Reinforcement

A technique in behavior modification that involves the addition of a reinforcing stimulus following a desired behavior, encouraging its recurrence.

Time-out

A behavioral intervention technique where an individual is temporarily removed from a reinforcing environment to decrease unwanted behaviors.

Appropriate Behavior

Behavior considered suitable or proper in a given context according to societal or specified standards.