On January 2, 2013, L Co. issued at face value $20,000 of 4% bonds convertible in total into 1,000 shares of L's common stock. No bonds were converted during 2013. Throughout 2013, L had 1,000 shares of common stock outstanding. L's 2013 net income was $2,000. L's income tax rate is 50%.
No potential common shares other than the convertible bonds were outstanding during 2013.
L's diluted earnings per share for 2013 would be:
A)$1.00.
B)$1.20.
C)$1.40.
D)$2.00.

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The Answer of On January 2, 2013, L Co. issued at face value $20,000 of 4% bonds convertible in total into 1,000 shares of L's common stock. No bonds were converted during 2013. Throughout 2013, L had 1,000 shares of common stock outstanding. L's 2013 net income was $2,000. L's income tax rate is 50%.
No potential common shares other than the convertible bonds were outstanding during 2013.
L's diluted earnings per share for 2013 would be:
A)$1.00.
B)$1.20.
C)$1.40.
D)$2.00.