When bonds are converted into common stock, the carrying value of the bonds is transferred to paid-in capital accounts.

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When bonds are converted into common stock, the carrying value of the bonds is transferred to paid-in capital accounts. This is because the bondholders are essentially exchanging their debt for ownership in the company, and the transfer of the carrying value to paid-in capital reflects the increase in the company's equity resulting from the conversion.

When Bonds Are Converted into Common Stock, the Carrying Value