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.

Question

Business

Whitney

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.

+5

Answers (1)

Know the Answer?

Stephen Buck · Answer 1

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)