On maturity of the convertible bond with a mandatory conversion, the entry is to:

Group of answer choices

Reduce the equity balance for the principal and increase common shares at the book value

Reduce the liability balance for the principal and increase common shares at the book value of the liability.

Reduce the equity balance for the principal and increase common shares with the market value of the shares and any difference is reported as a gain or loss on retirement of debt.

Reduce the equity balance for the principal and increase common shares with the market value of the shares and any difference is reported as contributed capital