Conversion of Bonds

On January 1, Stunt Corp. had outstanding convertible bonds with a face value of $1,000,000 and an unamortized discount of $100,000. On that date, the bonds were converted into 100,000 shares of $1 par stock. The market value on the date of conversion was $12 per share. The transaction will be accounted for with the book value method. By what amount will Stunts stockholders equity increase as a result of the bond conversion?

A) $100,000

B) $900,000

C) $1,000,000

D) $1,200,000

I think it is D. I am confused. Please explain.

Corporation

Wilton Corporation has 5,000 shares of 6% cumulative, $100 par value, preferred stock outstanding and 175,000 shares of common stock outstanding. No dividends have been paid by the company since May 31, Year 4. For the year ended May 31, Year 6, Wilton had net income of $1.45 million and wishes to pay common shareholders a dividend equivalent to 25% of net income. The total amount of dividends to be paid by Wilton Corporation at May 31, Year 6, is

A) $362,500

B) $392,500

C) $407,500

D) $422,500