On January 1, 2020, Bowen issues $800,000 of 5-year, 8% convertible bonds at par. The bonds are convertible into 40,000 shares of $2 par common stock.

In March, all of the convertible bonds are converted into common shares. On the conversion date, the shares are valued at $23 per share and the bonds are valued at $810,000.

Using the market value method, the journal entry to record the conversion would include:

a.	A debit to Loss on Bond Conversion of:	[ Select ] ["$0", "$120,000", "$840,000", "$130,000", "$10,000"]
b.	A credit to APIC-Common of:	[ Select ] ["$880,000", "$120,000", "$850,000", "$840,000"]

Using the book value method, the journal entry to record the conversion would include:

a.	A debit to Loss on Bond Conversion of:	[ Select ] ["$10,000", "$120,000", "$0", "$130,000"]
b.	A credit to APIC-Common of:	[ Select ] ["$120,000", "$720,000", "$880,000", "$840,000"]