Marigold Corp. has $4000000 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 $1230000 bonds exercised the conversion privilege. On that date, the market price of the bonds was 106 and the market price of the common stock was $37. The total unamortized bond premium at the date of conversion was $274000.
Marigold should record, as a result of this conversion, a:
A) credit of $163,200 to Paid-in Capital in Excess of Par.
B) credit of $144,000 to Paid-in Capital in Excess of Par.
C) credit of $67,200 to Premium on Bonds Payable.
d) loss of $9,600.
e) None of the above.
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Marigold Corp. has $4000000 of 8% convertible bonds outstanding. Each $1,000 bond is convertible int...
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