A company has $900,000 in bonds payable with an unamortized discount of $21,000. If two-thirds of the bonds are converted to common stock, the carrying value of the bonds payable will decrease by

Question

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The carrying value of the bonds is $900,000 - $21,000 = $879,000. Two-thirds of the bonds converted means a decrease of (2/3) * $879,000 = $586,000.

A Company Has $900,000 in Bonds Payable with an Unamortized