Question

Marin Corporation has outstanding 2,300 $1,000 bonds, each convertible into 40 shares of $10 par value common stock. The bonds are converted on December 31, 2020, when the unamortized discount is $27,900 and the market price of the stock is $21 per share.

Record the conversion using the book value approach. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

Answer 1

Credit Debit $ 2.300.000 Account Titles and Explanation Bonds Payable Discount on Bonds payable Common stock Paid in Capital in Excess of Par value - Common stock $ 27,900 S 920,000 $ 1.352.100 Working Notes: Bonds payable = 2300*$1000 = $2,300,000 Common stock = 40*2300*$10 = $920,000 Paid in Capital in excess of par value - Common stock = $2,300,000-$27.900-$920,000 = $1,352,100