Marshall Corporation has $31,000 of bonds outstanding with a carrying value of $39,400. The bonds are converted into 15,500 shares of $1 par value common stock immediately after the last interest payment. The common stock had a market value of $4 per share on the date of conversion. The entry to record the conversion would include a credit to:

1. Common Stock for $15,500 and credit to Paid-in Capital in Excess of Par for $23,900.
2. Cash for $39,400.
3. Bonds Payable for $31,000 and credit to Premium on Bonds Payable for $8400.
4. Common Stock for $15,500 and credit to Paid-in Capital in Excess of Par for $8400.