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In: Accounting

If sixty $1,000 convertible bonds with a carrying value of $70,000 are converted into 9,000 shares...

If sixty $1,000 convertible bonds with a carrying value of $70,000 are converted into 9,000 shares of $5 par value common stock, the journal entry to record the conversion is

Account Titles and Explanation Debit Credit
Bonds Payable (60 x $1000) 60,000
Premium on Bonds Payable (70,000 - 60,000) 10,000
Common Stock (9000 shares x 5) 45,000
Paid-in Capital in Excess of Par (70000 - 45000) 25,000

Please explain where does that bonds payable (60x 1000) comes from?

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