In: Accounting
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?