When the conversion of bonds payable to common stock is recorded under the book value method and the par value of the common stock exceeds the book value of the bonds, the difference is recorded as a
A)debit to Retained Earnings
B)debit to Loss on Conversion
C)debit to Additional Paid-in Capital-Common Stock
D)debit to Discount on Bonds Payable

Question

Quizplus · Accepted Answer

When the par value of the common stock exceeds the book value of the bonds, the difference is debited to Retained Earnings under the book value method.

When the Conversion of Bonds Payable to Common Stock Is