Testbank Multiple Choice Question 43

Bramble Corp. has $4080000 of 8% convertible bonds outstanding. Each $1,000 bond is convertible into 30 shares of $30 par value common stock. The bonds pay interest on January 31 and July 31. On July 31, 2021, the holders of $1210000 bonds exercised the conversion privilege. On that date the market price of the bonds was 105 and the market price of the common stock was $35. The total unamortized bond premium at the date of conversion was $280000. Bramble should record, as a result of this conversion, a

loss of $12100.

credit of $179400 to Paid-in Capital in Excess of Par.

credit of $89600 to Premium on Bonds Payable.

credit of $205000 to Paid-in Capital in Excess of Par.

Testbank Multiple Choice Question 49

Sheffield Corp. issued at a premium of $10000 a $209000 bond issue convertible into 3300 shares of common stock (par value $20). At the time of the conversion, the unamortized premium is $4400, the market value of the bonds is $229000, and the stock is quoted on the market at $60 per share. If the bonds are converted into common, what is the amount of paid-in capital in excess of par to be recorded on the conversion of the bonds?

$167400

$143000

$153000

$147400