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problem:  If twenty (20) $1,000 convertible bonds with a carrying rate of dollar 25,000 are converted into 3,000 shares of dollar 5 par value common stock, the journal entry to record the conversion is

[A] Bonds Payable ........................... 20,000

Premium on Bonds Payable ................ 5,000

Common Stock ......................... 25,000

[B] Bonds Payable ........................... 25,000

Discount on Bonds Payable ............ 5,000

Common Stock ......................... 15,000

Paid-in Capital in Excess of Par ..... 5,000

[C] Bonds Payable ........................... 25,000

Common Stock ......................... 25,000

[D] Bonds Payable ........................... 20,000

Premium on Bonds Payable ................ 5,000

Common Stock ......................... 15,000

Paid-in Capital in Excess of Par .... 10,000

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M920559

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