How Would the Exercise of an Option, That Was Part

Multiple Choice

How would the exercise of an option, that was part of an initial compound instrument, be recorded?

A) Common stock is recorded at an amount equal to the fair value of the options at date of conversion.
B) Common stock is recorded at an amount equal to the price determined by the Black-Sholes model.
C) Common stock is recorded at an amount equal to the market price of the shares on conversion date.
D) Common stock is recorded at an amount equal to the cash received plus the contributed surplus initially recorded.