on january 1, $362,400 of par value bonds with a carrying value of $388,000 is converted...
on january 1, $362,400 of par value bonds with a carrying value of $388,000 is converted to $60,400 shares of $5 par value common stock. The entry to record the conversion of the bonds includes all of the following entries except:
a. Debit to Premium on Bonds Payable $25,600.
b. Debit to Bonds Payable $388,000.
c. Credit to Common Stock $302,000.
d. Credit to Paid-in Capital in Excess of Par Value, Common Stock $86,000.
e. Debit to Bonds Payable $362,400.
Homework Answers
| Answer is: b. Debit to bonds payable $388000 | ||
| Workings: | ||
| Correct entry is: | ||
| Account Titles and Explanation | Debit | Credit |
| Bonds payable | $ 3,62,400 | |
| Premium on bonds payable ($388000 - $362400) | $ 25,600 | |
| Common stock (60400 X $5) | $ 3,02,000 | |
| Paid - in - capital in excess of par value, Common stock | $ 86,000 | |
| If it is helpful, please rate the answer and if any doubt arises let me know | ||
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