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Litke Corporation issued at a premium of $5,000 a $100,000 bond issue convertible into 2,000 shares of common stock (par value $40). At the time of the conversion, the unamortized premium is $2,000, the market value of the bonds is $110,000, and the stock is quoted on the market at $60 per share. If the bonds are converted into common, what is the amount of paid-in capital in excess of par to be recorded on the conversion of the bonds?

a) $40,000

b) $22,000

c) $32,000

d) $25,000

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9440926

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