What does applying the incremental (residual) method of accounting for convertible bonds involve?

a.A gain on the sale of the bond is realized for the difference between the sales proceeds and the fair value of the bond without the conversion option

b.The proceeds of the bond are allocated based on the relative market values of the straight bond and the conversion option

c.The bond is recorded at the maturity value of the obligation and the conversion option is valued using an option-pricing model

d.The option is valued at the difference between the sales proceeds and the market value of an equivalent bond without the option