Homework Answers
Answer c. To record the bond conversion.
| Date | Accounts Titles & Explanation | Debit | Credit |
| June 30, 2021 | Bond conversion expense (225 bonds * $50) | 11,250 | |
| Bonds payable (225 bonds * $1,000) | 225,000 | ||
| Common stock (225 bonds * 30 * $2) | 13,500 | ||
| Paid-in capital excess of par - Common (balancing fig.) | 211,500 | ||
| Cash (225 bonds * $50) | 11,250 |
Working :
Number of bonds conversion = ($300,000 / $1,000) * 75 % = 225 bonds
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