A company has $1,634,000 in bonds payable with an unamortized premium of $40,000.If one-fourth of the bonds are converted to common stock,the entry that would record the conversion is:
A) Bonds Payable 408,500
Common Stock 408,500
B) Bonds Payable 448,500
Common Stock 448,500
C) Common Stock 398,500
Bonds Payable 398,500
D) Bonds Payable 408,500
Unamortized Bond Premium 10,000
Common Stock 418,500

Question

Quizplus · Accepted Answer

When one-fourth of the bonds are converted, $408,500 of bonds payable is debited. The unamortized premium related to these bonds is $10,000, which is also debited. The total credited to common stock is $418,500.

A Company Has $1,634,000 in Bonds Payable with an Unamortized