When bonds issued under GAAP with a beneficial conversion option are converted, the Additional Paid-In Capital-- Beneficial Conversion Feature ________.
A) remains unchanged
B) is recorded as a loss
C) is appropriately removed
D) is added in full to the paid-in capital in excess of par - common

Question

Quizplus · Accepted Answer

When bonds with a beneficial conversion option are converted, the Additional Paid-In Capital related to the beneficial conversion feature is removed as it is no longer applicable.

When Bonds Issued Under GAAP with a Beneficial Conversion Option