On January 1, $300,000 of par value bonds with a carrying value of $310,000 is converted to 50,000 shares of $5 par value common stock. The entry to record the conversion of the bonds includes all of the following entries except:
A) Credit to Paid-In Capital in Excess of Par Value, Common Stock $60,000.
B) Debit to Bonds Payable $310,000.
C) Debit to Premium on Bonds Payable $10,000.
D) Credit to Common Stock $250,000.
E) Debit to Bonds Payable $300,000.

Question

Quizplus · Accepted Answer

The correct entry should debit Bonds Payable for the par value of $300,000, not the carrying value of $310,000.

On January 1, $300,000 of Par Value Bonds with a Carrying