Marshall Corporation Has $30,000 of Bonds Outstanding with a Carrying

Multiple Choice

Marshall Corporation has $30,000 of bonds outstanding with a carrying value of $38,400.The bonds are converted into 15,000 shares of $1 par value common stock immediately after the last interest payment.The common stock had a market value of $5 per share on the date of conversion.The entry to record the conversion would include a credit to:

A) Common Stock for $15,000 and credit to Paid-in Capital in Excess of Par for $8,400.
B) Bonds Payable for $30,000 and credit to Premium on Bonds Payable for $8,400.
C) Cash for $38,400.
D) Common Stock for $15,000 and credit to Paid-in Capital in Excess of Par for $23,400.