When a bond issuer makes a cash payment to bondholders to induce conversion how is this payment recorded? It increases paid-in capital It is capitalized to bonds payable. It is expensed It creates a liability Question 12 2.5 pts Why are restrictions placed on repurchases and dividend payments? Loan covenants place restrictions so lenders get paid in the future. The FASB places restrictions to guarantee smooth future dividend payments. Investors restrict payments to build up earnings The SEC does not let a firm pay out more than 5% of retained earnings