On July 1, 2020, Salem Corporation issued $1,400,000 of 7% bonds due in 10 years. The bonds pay cash interest semiannually. Each $1,000 bond includes a detachable stock purchase warrant. Each warrant gives the bondholder the right to purchase, for $30, one share of $1 par value common stock at any time during the next 10 years. The bonds were sold at 101. The value of the stock purchase rights at the time of issuance was $70,000. The bonds would sell without warrants at $1,358,000. Salem Corporation uses the proportional method to allocate the selling price between bonds and stock warrants. The journal entry to record the exercise of all stock warrants when incurred includes

a.A credit to Common Stock account by $111,314.

b. A debit to Paid-in Capital-Stock Warrants account by $69,314.

c. A credit to Cash account by $42,000.

d. A debit to Paid-in Capital in Excess of Par-Common Stock account by $109,914.