C8.4. Inaccounting fur theconversion ofconvertible bondstocommon stock,mostfirms recordthe issueof sharesat theamount of thebookvalueof the bonds. The issue of the sharescouldbe recorded at their market value, withthe difference between the market valueof thesbares andthebookvalueof thebondsrecorded asa losson the conversion. Which treatment best reflects the effectof the transaction on the wealth of the existing shareholders?