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Financial Accounting MCQs

When bonds are converted into common stock:

the market price of the stock is considered in the entry.

the market price of the bonds is transferred to paid-in capital.

a gain or loss is recognized.

the carrying value of the bonds is transferred to paid-in capital accounts.

the face price of the bonds is transferred to paid-in capital.

Answer

Correct Answer: the carrying value of the bonds is transferred to paid-in capital accounts.

Explanation:

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