When a bond is converted into common stock,

Select one:

common stock is credited for the fair value of the stock on the conversion date

any difference between the carrying value of the bonds and par of the stock is deducted from/added to paid in capital

any difference between the carrying value of the bonds and par of the stock is expensed in period of conversion

the bond issuer recognizes a gain or loss

losses on conversion are recognized but gains are not