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Bridge Corporation Had Two Issues of Securities Outstanding-- Common Stock

question 43

Multiple Choice

Bridge Corporation had two issues of securities outstanding-- common stock and a 5 percent convertible bond issue in the face amount of $10,000,000.Interest payment dates of the bond issue are June 30 and December 31.The conversion clause in the bond indenture entitles the bondholders to receive 40 shares of $20 par value common stock in exchange for each $1,000 bond.On June 30,2014,the holders of $1,800,000 face value bonds exercised the conversion privilege.The market price of the bonds on that date was $1,100 per bond and the market price of the common stock was $35.The total unamortized bond discount at the date of conversion was $500,000.What amount should Bridge credit to the account "Paid-In Capital in Excess of Par" as a result of this conversion assuming Bridge does not want to recognize any gain (or loss) on the conversion?

Definitions:

Punished

The act of imposing a penalty or negative consequence on someone or something as a result of their behavior or actions.

Operant Conditioning

A learning process through which behavior is shaped and maintained by consequences, including rewards and punishments.

Classical Conditioning

Classical conditioning refers to the learning mechanism where a response initially triggered by a second stimulus becomes triggered by the first stimulus after the two stimuli have been paired together repeatedly.

Skinner

B.F. Skinner, an American psychologist known for his influential work in behaviorism and for developing the theory of operant conditioning.