4. According to US GAAP, convertible bonds must be recorded at the value of

1. Debt only.
2. Debt plus the value of the conversion feature
3. Debt minus the value of the conversion shares
4. The debts face value.

5. Debenture bonds

1. Have priority over other indebtedness.
2. Pay interest only if Retained Earnings are sufficient to do so.
3. May be exchanged for equity securities.
4. Are not secured by collateral.