On January 1, 2010, Aguilar Products Issued $24, 000 of Ten-Year

Multiple Choice

On January 1, 2010, Aguilar Products issued $24, 000 of ten-year bonds at 98.These bonds were each convertible into ten shares of $100 par common stock.On January 1, 2017, Lee converted two-thirds of these bonds when the common stock was selling at $130 a share.What would be the loss on bond conversion? $\begin{array}{llll}& \text {Book Value Method}& \text {Market Value Method}\\\text { I. } & \$ 4,896 & \$ 0 \\\text { II. } & \$ 5,088 & \$ 0 \\\text { III. } & \$ 0& \$ 4,896 \\\text { IV. } & \$0 & \$ 5,088\end{array}$

A) I
B) II
C) III
D) IV