On July 1, 2020, SB, Inc. converted (swapped) bonds with a par value of $ 120,000 for 1,000 common shares of Empresas Madagascar. Madagascar's shares are worth $ 50 each. Before the exchange, the discount account in bonds payable reflected an unamortized balance of $ 5,000 on the books of Empresas Madagascar. Madagascar companies will have to recognize

a.a gain on bond conversion of $ 65,000.

b. an increase of $ 115,000 in the total equity (shareholders' equity) of the company.

c. a cash increase of $ 54,000.

d. a net reduction in total debt of $ 120,000.