LO 14.7 On December 31, Year 1, Dare Corporation had outstanding 8%, $2,000,000 face value convertible bonds maturing on December 31, Year 5. Interest is payable annually on December 31. Each $1,000 bond is convertible into 60 shares of Dare's $10 par value common stock. On January 2, Year 3, when the Premium on Bonds Payable account balance was $45,000, an individual holding 200 of the bonds exercised the conversion privilege when the market value of Dare's common stock was $18 per share. Using the book value method, Dare's entry to record the conversion should include a credit to Additional Paid-in Capital of: a. $80,000 b. $84,500 c. $96,000 d. $125,000

LO 14.7 On December 31, Year 1, Dare Corporation had outstanding 8%,$2,000,000 face value convertible bonds maturing on December 31, Year 5 . Interest is payable annually on December 31. Each $1,000 bond is convertible into 60 shares of Dare's $10 par value common stock. On January 2, Year 3, when the Premium on Bonds Payable account balance was $45,000, an individual holding 200 of the bonds exercised the conversion privilege when the market value of Dare's common stock was $18 per share. Using the book value method, Dare's entry to record the conversion should include a credit to Additional Paid-in Capital of: a. $80,000 b. $84,500 c. $96,000 d. $125,000