When the conversion of bonds payable to common stock is recorded under the market value method and the market value of the common stock exceeds the book value of the bonds at date of conversion, the difference is recorded as a debit to Loss on Conversion. debit to Additional Paid-in Capital−Common Stock. debit to Discount on Bonds Payable. debit to Retained Earnings.
When the conversion of bonds payable to common stock is recorded under the market value method and the market value of the common stock exceeds the book value of the bonds at date of conversion, the difference is recorded as a debit to Loss on Conversion. debit to Additional Paid-in Capital−Common Stock. debit to Discount on Bonds Payable. debit to Retained Earnings.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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When the conversion of bonds payable to common stock is recorded under the market value method and the market value of the common stock exceeds the book value of the bonds at date of conversion, the difference is recorded as a
debit to Loss on Conversion.
debit to Additional Paid-in Capital−Common Stock.
debit to Discount on Bonds Payable.
debit to Retained Earnings .
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