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30 December, 17:54

Bondholders of Balm Co. converted their bonds into 90,000 shares of $5 par value common stock. In Balm's accounting records, the bonds had a par value of $775,000 and unamortized discount of $23,000 at the time of conversion. What amount of additional paid-in capital from the conversion should Balm record?

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  1. 30 December, 19:08
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    additional paid-in capital amount is $302000

    Explanation:

    given data

    share = 90000

    common stock = $5 par value

    accounting records par value = $775,000

    discount = $23000

    to find out

    amount of additional paid-in capital

    solution

    we know here debit amount bond payable is $775000

    and

    credit amount is discount that is $23000

    and common stock par value that is = share * par value

    common stock par value that is = 90000 * 5

    common stock par value that is = 450000

    so

    additional paid-in capital amount is = bond payable - discount - common stock

    additional paid-in capital amount is = 775000 - 23000 - 450000

    additional paid-in capital amount is = $302000
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