On December 31, 2019, Dare Corporation had outstanding 8%, $2,000,000face value convertible bonds maturing on December 31, 2023. Interest ispayable annually on December 31. Each $1,000 bond is convertible into60 shares of Dare's $10 par value common stock. On January 2, 2021,when the Premium on Bonds Payable account balance was $45,000, anindividual holding 200 of the bonds exercised the conversion privilegewhen the market value of Dare's common stock was $18 per share. Usingthe book value method, Dare's entry to record the conversion shouldinclude a credit to Additional Paid-in Capital of:a. $80,000b. $84,500c. $96,000d. $125,000

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A:

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