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14 February, 01:06

On January 1, $343,200 of par value bonds with a carrying value of $364,000 is converted to 57,200 shares of $5 par value common stock. The entry to record the conversion of the bonds includes all of the following entries except:A. Debit to Premium on Bonds Payable $20,800. B. Credit to Common Stock $286,000. D. Credit to Paid-In Capital in Excess of Par Value, Common Stock $78,000. E. Debit to Bonds Payable $343,200.

F. Debit to Bonds Payable $364,000.

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  1. 14 February, 02:43
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    F. Debit to Bonds Payable $364,000.

    Explanation:

    The journal entries are shown below:

    1. Cash A/c Dr $364,000

    To Bonds payable A/c $343,200

    To Premium on Bonds payable A/c $20,800

    (Being bond is issued)

    2. Bonds payable A/c $343,200

    Premium on Bonds payable A/c $20,800

    To Common Stock $286,000

    To Paid-In Capital in Excess of Par Value, Common Stock $78,000

    (Being conversion of bonds is recorded)
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