Please show steps thanks! Marley, Inc. sold $500,000 of its ten-year 8% bonds at 96 on...

Please show steps thanks!

Marley, Inc. sold $500,000 of its ten-year 8% bonds at 96 on January 1, 2014. Interest is paid each January 1 and July 1 and straight-line amortization is used. Each $1,000 bond is convertible into 100 shares of $10 par common stock. One-half of the bonds were converted on January 1, 2019, when the market value of the stock was $14 per share.

The entry to record the conversion using the book value method would include a

	a.	debit to Loss on Conversion for $5,000.
	b.	debit to Retained Earnings for $5,000.
	c.	debit to Discount on Bonds Payable for $5,000.
	d.	credit to Additional Paid-in Capital from Bond Conversion for $5,000.

The entry to record the conversion using the market value method would include a

	a.	debit to Additional Paid-in Capital from Bond Conversion for $105,000.
	b.	debit to Retained Earnings for $105,000.
	c.	debit to Loss from Conversion for $105,000.
	d.	credit to Gain from Conversion for $105,000.

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ekkarill92 answered 10 months ago

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