Conversion of bonds payable into common stock will include a:
A) debit to bonds payable and a credit to common stock
B) debit to bonds payable and a credit to paid-in capital in excess of par
C) debit to cash and a credit to common stock.
D) debit to cash and a credit to paid-in capital in excess of par.

Question

Quizplus · Accepted Answer

When bonds payable are converted into common stock, the bonds payable account is debited to remove the liability, and the common stock account is credited to reflect the issuance of new shares.

Conversion of Bonds Payable into Common Stock Will Include A