Question

Marigold Corp. issued at a premium of $10500 a $192000 bond issue convertible into 4700 shares of common stock (par value $20). At the time of the conversion, the unamortized premium is $4000, the market value of the bonds is $212000, and the stock is quoted on the market at $60 per share. If the bonds are converted into common, what is the amount of paid-in capital in excess of par to be recorded on the conversion of the bonds

Answer 1

Answer: $102000

Step-by-step explanation:

The following can be deduced fkem the question:

Face value of bonds = $192000

Unamortized Premium = $4000

Conversion of Equity Shares = 4700 x $20 = $94000

Paid in Capital in Excess of Par = $192000 + $4000 - $94000

= $102000